November 16, 2018 / 1:57 PM / a month ago

EMERGING MARKETS-Brazil gains on Bolsonaro's choice to head central bank, Mexican peso falls

    Nov 16 (Reuters) - Brazil's real and stocks rose on Friday,
welcoming the incoming government's choice to head the central
bank, while Mexico's peso weakened in line with other emerging
markets that were pressured by uncertainties around Brexit.
    Returning from a one-day local market holiday, Brazil's real
 rose half a percent, while the Bovespa stock index
 hit its highest in a week, led by financial and material
stocks.
    Paulo Guedes, President-elect Jair Bolsonaro's economy
adviser, said economist and senior executive at Banco Santander
Brasil Roberto Campos Neto agreed to be the central bank's new
chief, reinforcing confidence in the Bolsonaro administration's
market friendliness.
    Campos Neto will take the place of current central bank
chief Ilan Goldfajn, who is popular with investors, after the
Congress approves his appointment. 
    The Mexican peso gave up almost all of its gains
logged last session after the central bank hiked the overnight
bank rate by a quarter basis point to 8 percent in a widely
expected move.
    The currency's weakness comes as questions loom large about
how Britain's exit from the European Union will play out.
Emerging market currencies from China to South Africa weakened
on the uncertainty. 
    The peso had climbed 0.86 percent on Thursday after Bank of
Mexico hiked rates to tame inflation.
    But the bank issued a strong warning to the incoming
government - whose perceived policy missteps caused a peso
decline since the bank's October meeting - that any more errors
could fan further upside risk to inflation. 
    The Mexican peso and stock market had take a beating after
President-elect Andres Manuel Lopez Obrador canceled a
multi-billion dollar airport project, and after a senator from
his government proposed capping and eliminating certain banking
commissions.
    The peso's weakness comes as automaker groups warn U.S.
tariffs will undermine the new trade deal between the United
States, Mexico and Canada. 
    Key Latin American stock indexes and currencies at 1308 GMT:
 Stock indexes                             daily %       YTD %
                               Latest       change      change
 MSCI Emerging Markets            982.58      0.18      -15.33
                                                    
 MSCI LatAm                      2601.66      0.71       -8.66
                                                    
 Brazil Bovespa                 86289.72      0.37       12.94
                                                    
 Mexico IPC                            -         -           -
                                                    
 Chile IPSA                      5181.56      0.11        0.11
                                                    
 Argentina MerVal                      -         -           -
                                                    
 Colombia IGBC                         -         -           -
                                                    
                                                              
 Currencies                                daily %       YTD %
                                            change      change
                                  Latest            
 Brazil real                      3.7621      0.52      -11.93
                                                    
 Mexico peso                     20.3489     -0.61       -3.19
                                                    
 Chile peso                        674.4      0.25       -8.86
                                                    
 Colombia peso                   3187.98     -0.01       -6.46
 Peru sol                              -         -           -
                                                    
 Argentina peso (interbank)            -         -           -
                                                    
 

 (Reporting by Susan Mathew in Bengaluru;
Editing by Phil Berlowitz)
  
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