October 12, 2017 / 9:44 PM / a year ago

EMERGING MARKETS-Mexico peso sinks to five-month low on NAFTA concerns

    MEXICO CITY, Oct 12 (Reuters) - Mexico's peso sank to its
weakest in nearly five months on concerns that talks to
renegotiate the North American Free Trade Agreement (NAFTA)
could founder and undermine demand for the country's exports.
    Mexican Finance Minister Jose Antonio Meade said that the
country is working on plans that include tariff measures and
finding substitute markets in case talks to rehash NAFTA are
    The peso shed close to 1 percent following
Meade's comments, trading at its weakest since May 18.
    "There are worries about the end of NAFTA," said Pedro
Tuesta, an analyst at Continuum Economics, adding that Meade's
comments deepened the peso's losses.
    "Just how much (the peso) could fall depends on how credible
this 'Plan B' of Mexico's is, but the initial drop could be
substantial," he said.  
    Negotiators from Mexico, the United States and Canada have
been holding a fourth round of talks near Washington, D.C. and
facing demands from the administration of U.S. President Donald
    Trump said he would be open to bilateral trade deals with
Canada and Mexico if talks between the three countries fall
    The peso has shed close to 4 percent since last Tuesday on
growing jitters about NAFTA. Mexico sends nearly 80 percent of
its exports to its northern neighbor and Trump has threatened in
the past to slap tariffs on key exports like autos.
    Stocks in Chile, meanwhile, slid for the third day in a row
as traders booked profits on a rally last week to a record high.
    Argentina's benchmark stock index rose, trading near an
all-time high hit this week, backed by bets that the ruling
party would do well in legislative elections on Oct. 22.
    "Investors are betting that favorable results in the
elections will provide enough political space to advance in
reforms needed to reduce the fiscal deficit and inflation," said
Gustavo Ber, head of consultancy Estudio Ber.
    Brazil, Latin America's biggest stock market, was closed for
a holiday. 
    Key Latin American stock indexes and currencies at 2100 GMT:
 Stock indexes                  Latest     Daily   YTD pct
                                            pct    change
 MSCI Emerging Markets          1,121.62     0.38    30.08
 MSCI LatAm                     2,950.48    -0.19    26.05
 Brazil Bovespa                76,659.80   Closed    27.28
 Mexico IPC                    49,962.79    -0.35     9.46
 Chile IPSA                     5,435.08    -0.56    30.92
 Chile IGPA                    27,219.85    -0.51    31.28
 Argentina MerVal              27,075.07     0.69    60.04
 Colombia IGBC                 11,060.85     0.09     9.21
 Venezuela IBC                    532.07     0.18   -98.32
 Currencies                     Latest     Daily   YTD pct
                                            pct    change
 Brazil real                      3.1690   Closed     2.53
 Mexico peso                       18.92    -1.11     9.64
 Chile peso                        624.2     0.14     7.45
 Colombia peso                   2,940.9     0.35     2.06
 Peru sol                          3.253     0.18     4.95
 Argentina peso (interbank)      17.4150     0.03    -8.84
 Argentina peso (parallel)         17.84     0.06    -5.72
 (Reporting by Michael O'Boyle in Mexico City and Walter Bianchi
in Buenos Aires)
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