November 16, 2018 / 9:58 PM / in a month

EMERGING MARKETS-Latam FX gains against weak dollar, Mexican stocks snap losing run

 (Recasts throughout, adds quotes, updates prices)
    By Aaron Saldanha
    Nov 16 (Reuters) - Latin American stocks and currencies
soared on Friday to more than one-week closing highs, aided by a
soft dollar, with assets in Brazil and Mexico putting in
particularly strong showings.   
    The greenback weakened as markets perceived U.S. Federal
Reserve Vice Chair Richard Clarida's comments that U.S. interest
rates were nearing Fed estimates of a neutral rate as dovish.

    MSCI's indexes of Latin American currencies
and stocks saw their best sessions in more than
a month each, rising 0.9 percent and 3.2 percent, respectively. 
    "We have been long of the view that the most robust support
to emerging markets in a non-recessionary environment is a
dovish Fed," wrote Citigroup Head of Emerging Market Strategy
Dirk Willer and Emerging Markets FX Strategist Kenneth Lam in a
note. 
    Even a small shift by the Fed should benefit emerging market
currencies though it is "still too early for the all clear from
the Fed," they added.    
    Mexico's peso firmed 0.4 percent, extending
Thursday's 0.9 percent gain, which came after the central bank
raised borrowing costs and left the door open to another raise.
 
    Local stocks gained 2.2 percent to snap a four day
losing run. They came off more than two and a half year
closing-lows clocked on Thursday as investors bought beaten down
names on the bourse. 
    Weak investor sentiment has pummeled the main index in
recent weeks, hit first by the scrapping of an already started
airport project and then by a senator's proposal to cap and
remove certain banking commissions.
    Despite Friday's rise, heavy losses earlier in sessions
consigned the benchmark to a 4.3 percent loss for the week, its
worst weekly performance in more than nine months.
    Brazil's real zoomed 1.1 percent in its biggest
one-day firming in three weeks. The Bovespa stocks index
rose 3 percent on broad-based gains as Roberto Campos'
appointment as the new central bank chief on Thursday buoyed
markets, which re-opened for trade on Friday. 
  
    "I know Roberto Campos very well and I can assure you we
will be in good hands. Wherever he has worked there have been
excellent results," said Rogerio Xavier, a partner at SPX
Capital.
    Argentina's peso firmed about 0.2 percent. Data
showed the country's primary deficit fell 49 percent
year-on-year in October.
    The country's equity benchmark rose 2.1 percent to a
more than one week-closing high, as gains were recorded across
the board.
    The central bank could remove its benchmark interest rate
floor as soon as Dec. 3 if it sees inflation expectations dip
for two months in a row, sources said.    
    
    Key Latin American stock indexes and currencies at 2124 GMT
    
 Stock indexes                                daily   YTD %
                                                  %  change
                                   Latest    change  
 MSCI Emerging Markets               986.30    0.56  -14.86
 MSCI LatAm                         2666.74    3.23   -5.71
 Brazil Bovespa                    88515.27    2.96   15.85
 Mexico IPC                        42357.79    2.19  -14.18
 Chile IPSA                         5190.98    0.29    0.29
                                                     
 Argentina MerVal                  31109.25    2.09    3.47
 Colombia IGBC                     12353.55    0.22    8.64
                                                           
 Currencies                                   daily   YTD %
                                                  %  change
                                             change  
                                     Latest          
 Brazil real                         3.7434   -0.15  -11.49
 Mexico peso                        20.1700    0.27   -2.34
 Chile peso                           670.6    0.82   -8.34
 Colombia peso                       3166.1    0.68   -5.81
 Peru sol                             3.374    0.24   -4.06
 Argentina peso (interbank)         35.9300    0.45  -48.23
                                                     
 Argentina peso (parallel)               35    0.71  -45.06
                                                     
 
 (Reporting by Aaron Saldanha in Bengaluru; Additional reporting
by Paula Arend Laier in Sao Paulo; Editing by Sandra Maler)
  
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