February 7, 2020 / 2:44 PM / 2 months ago

EMERGING MARKETS-Latam FX slide, Brazil's real hits all-time low

    By Susan Mathew
    Feb 7 (Reuters) - Brazil's real hit an all-time low on
Friday, and other Latin American currencies also weakened, in
line with their broader emerging market peers as the mounting
death toll from the deadly new coronavirus dented investor
    The real fell half a percent to 4.303 per dollar as
traders tested the central bank's resolve not to intervene in
the market to arrest its decline.
    Data showed that inflation in January posted its smallest
rise since 1994. The currency extended losses after the central
bank cut rates to new lows late on Wednesday.
    "The historically low key rate remains a burdening factor
for the BRL, especially since the real interest rate is now
close to zero," wrote You-Na Park-Heger, an analyst at
    "We therefore see no scope for a recovery in the BRL for the
time being," she said, adding that a moderate pick-up in the
currency can be expected in the second half of the year as the
government's reform efforts take effect and as the economy
gradually recovers. 
    Other regional currencies were well in the red against a
steady dollar. U.S. data showing job creation grew much more
than expected in January barely elicited a reaction from the
greenback as it was tempered by expectations of a slowdown in
February as the coronavirus disrupts supply chains.

    The death toll from the virus climbed to 636 and the number
of infected cases rose above 30,000 in China, hitting commodity
prices and prompting warnings from companies regarding
production suspensions and falling demand from China.

   Falling oil prices knocked 0.7% off the Colombian peso
and put it on course for its third consecutive day of losses,
while Mexico's peso fell 0.4%.
    The Chilean peso gave up 0.7% as copper prices
slipped. Data showed Chile copper export revenue jumped 8.3% in
January. The country is the world's top producer of the red
    Separate data showed Chile's annual inflation hit 3.5%,
rising toward the upper end of the central bank's 2% to 4%
    Brazil stocks fell 0.4% as iron ore miner Vale
weighed. Fashion retailer Lojas Renner SA topped the
index after reporting an almost 17% jump in its fourth-quarter
net income.
    Key Latin American stock indexes and currencies at 1426 GMT:
    Stock indexes             Latest    Daily %
 MSCI Emerging Markets         1092.96     -0.86
 MSCI LatAm                    2777.83      -0.9
 Brazil Bovespa              114737.27     -0.39
 Mexico IPC                          -         -
 Chile IPSA                    4677.66     -0.47
 Argentina MerVal             41210.84     0.745
 Colombia COLCAP                     -         -
       Currencies             Latest    Daily %
 Brazil real                    4.3029     -0.41
 Mexico peso                   18.7375     -0.44
 Chile peso                      789.3     -0.70
 Colombia peso                 3401.06     -0.68
 Peru sol                       3.3828     -0.24
 Argentina peso                60.7400     -0.09
 (Reporting by Susan Mathew in Bengaluru;)
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