June 17, 2019 / 2:14 PM / a year ago

EMERGING MARKETS-Most Latam currencies rise against softer dollar

    By Susan Mathew
    June 17 (Reuters) - Latin American currencies largely rose
against a softer dollar on Monday ahead of a U.S. Federal
Reserve policy setting meeting this week which is expected to
lay the groundwork for a rate cut later this year.
    Lower U.S. interest rate boost the relative attractiveness
of developing world assets, usually spurring broad inflows into
emerging markets.   
    The Federal Reserve is expected to leave borrowing costs
unchanged at the end of its two-day meeting on Wednesday but
possibly signal a rate cut this year.
    "The meeting is all about providing the markets with
sufficient reassurance that the next move will be a cut, most
likely in July," wrote Piotr Matys, an emerging markets FX
strategist at Rabobank.
    Investors in the region are also waiting for Brazil's
central bank rate decision meeting on Wednesday.
    "We expect the Selic rate to stay unchanged at 6.50%, while
a more dovish tone is likely to open doors for one cut later in
2019," said Vladimir Miklashevsky, a senior economist and
trading desk strategist at Danske Bank.
    "Currently, there are fewer worries about accelerating
inflation, which has climbed above the target, while staying
within the boundaries." 
    Brazil's real was up 0.12%. The currency slipped more
than 1% on Friday after the country's economy minister expressed
strong disappointment with what he called excessive changes to
the government's pension reform bill.
    The minister, Paulo Guedes, had urged the government not to
make too many changes to the bill which is seen as crucial in
fixing the economy.
    Mexico's peso barely moved after posting a 2.4% rise
last week when a deal to avert U.S. tariffs on Mexican goods
helped the currency recover from lows hit on the tariff threats.
    The United States has doubled the number of asylum seekers
it sends back each day to Mexico from El Paso, Texas, a Mexican
immigration official said on Friday, in the first sign of action
following a deal struck to avert U.S. tariffs last week.

    Among stocks, those listed in Sao Paulo were flat.
Financial and material heavy-weights fell, while consumer stocks
    Mining major Vale slipped 0.9%. The iron ore
miner said it expects to soon restore 20 million tonnes of
yearly capacity at its Brucutu mine in Brazil, which sent the
steel-making ingredient's prices lower.
    IRB Brasil Resseguros SA recovered from last
session's decline when it fell after sources said Brazil's
government and BB Seguros Participações SA planned to sell their
stakes in the reinsurer by July.
      Key Latin American stock indexes and currencies at 1344
    Stock indexes             Latest    Daily %
 MSCI Emerging Markets         1011.37     -0.37
 MSCI LatAm                    2747.43     -0.24
 Brazil Bovespa               98019.70     -0.02
 Mexico IPC                          -         -
 Chile IPSA                          -         -
 Colombia IGBC                       -         -
       Currencies             Latest    Daily %
 Brazil real                    3.8887      0.26
 Mexico peso                   19.1580     -0.04
 Chile peso                      698.5      0.19
 Colombia peso                 3273.99     -0.18
 Peru sol                        3.346      0.00
 (Reporting by Susan Mathew in Bengaluru;
Editing by Susan Thomas)
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