February 11, 2020 / 3:31 PM / 6 months ago

EMERGING MARKETS-Latam FX up on encouraging news on virus; Colombian peso off 2-month lows

    * Virus may peak this month in China -expert
    * Colombian peso climbs away from two-month low 
    * Latam FX index set to break four-day losing streak 

    By Shreyashi Sanyal
    Feb 11 (Reuters) - Latin American currencies advanced on
Tuesday, as China's top medical adviser said the coronavirus
outbreak may be over by April, while Colombia's peso gained on
the back of higher oil prices.  
    China's foremost medical adviser on the outbreak, Zhong
Nanshan, told Reuters numbers of new cases were falling in parts
and forecast the epidemic would peak this month.
    The World Health Organization (WHO) said on Tuesday 1,017
people had died in China where there were 42,708 cases.
    "While the global death toll from the virus exceeded 1,000,
the number of new infections in China fell almost 20% from the
previous day to the smallest rise since February 1. Admittedly,
this is very encouraging," analysts at Rabobank wrote in a
client note. 
    Worries of how damaging the impact from the virus outbreak
could be on the world's second largest economy has hit investor
appetite for riskier assets in emerging markets, as a
significant portion of demand for Latin American goods comes
from China. 
    Easing of some concern over the potential for lengthy
disruption to oil demand helped push crude prices up from
13-month lows hit in the previous session.
    Higher prices of oil, Colombia's main export, lifted its
peso currency from two-month lows. 
    MSCI's index for Latin American currencies
rose 0.2%, set to break a four-day losing streak. 
    Other major currencies in the region also firmed versus the
dollar - Brazil's real, Mexican peso and the
Chilean peso.
    In Brazil, minutes of the central bank's last policy meeting
showed economic and financial impact of Brazil's recent interest
rate cuts may be greater than in previous periods, thereby
justifying a pause in its unprecedented easing cycle.

    Sao Paolo stocks jumped 2%, with energy companies
Cosan SA and Ultrapar Participações SA
leading gains by rising about 5% each.     
    Key Latin American stock indexes and currencies at 1511 GMT
   Stock indexes               Latest       Daily % change
 MSCI Emerging Markets            1101.15               1.31
 MSCI LatAm                       2790.09               2.04
 Brazil Bovespa                 114955.99               2.12
 Mexico IPC                      44883.82               1.34
 Chile IPSA                       4647.40               0.43
 Argentina MerVal                40404.20              -1.58
 Colombia COLCAP                  1643.00              -0.01
       Currencies              Latest       Daily % change
 Brazil real                       4.3090               0.26
 Mexico peso                      18.6580               0.21
 Chile peso                        790.86               0.32
 Colombia peso                    3428.81               0.75
 Peru sol                          3.3848               0.24
 Argentina peso                   61.1175              -0.23

 (Reporting by Shreyashi Sanyal in Bengaluru)
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