February 20, 2018 / 5:46 PM / a year ago

EMERGING MARKETS-LatAm currencies weaken as dollar rebounds globally

    By Bruno Federowski
    SAO PAULO, Feb 20 (Reuters) - Latin American currencies
weakened on Tuesday as the U.S. dollar strengthened worldwide
after hitting a three-year low last week.
    Currencies from Brazil, Mexico and Colombia
 weakened between 0.3 percent and 0.9 percent. The Chilean
peso was barely changed as profit-taking partially
offset the global upswing in the U.S. currency.
    Concerns that the United States could pursue a weaker dollar
policy and by mounting worries about the U.S. budget deficit
have driven the dollar sharply lower this year.
    Some investors turned to bargain hunting on Tuesday,
however, ahead of a series of U.S. debt auctions.
    Stock markets in the region were mostly up, with Brazil's
benchmark Bovespa stock index leading gains even after
policymakers ditched a plan to curb social security spending.
    Investors saw the plan as key to boosting long-term economic
growth, but had mostly given up on it after months of wrangling
in Congress failed to advance the unpopular bill.
    "Markets already expected that the pension reform would be
buried," said Ricardo Silva, a trader at Correparti brokerage.
    Moody's Investors Service on Tuesday said the government's
decision was credit negative and will "severely restrict"
policymakers' abilities to comply with budget rules.

    Shares in power utility Centrais Elétricas Brasileiras SA
 were the biggest gainers on the benchmark index as
investors bet the government would turn its efforts to the
privatization of the state-owned company.
    Key Latin American stock indexes and currencies at 1715 GMT:
 Stock indexes                                daily %    YTD %
                                     Latest    change   change
 MSCI Emerging Markets               1196.64    -0.37     3.68
 MSCI LatAm                          3128.86     0.58       10
 Brazil Bovespa                     86124.40     1.57    12.73
 Mexico IPC                         48671.68    -0.52    -1.38
 Chile IPSA                          5660.67     0.56     1.73
 Chile IGPA                         28427.49     0.39     1.60
 Argentina MerVal                   33080.72     -0.6    10.03
 Colombia IGBC                      11786.72     0.84     3.66
 Currencies                                   daily %    YTD %
                                               change   change
 Brazil real                          3.2425    -0.29     2.18
 Mexico peso                         18.6335    -0.53     5.72
 Chile peso                              594     0.10     3.48
 Colombia peso                       2857.78    -0.86     4.35
 Peru sol                              3.252    -0.18    -0.46
 Argentina peso (interbank)          19.8500    -0.38    -6.30
 Argentina peso (parallel)             20.15     0.40    -4.57
 (Reporting by Bruno Federowski; Editing by Jonathan Oatis)
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