October 18, 2019 / 8:22 PM / a month ago

EMERGING MARKETS-Brazil's real eyes biggest gain in six weeks as dollar wilts

 (Updates market price, adds details)
    By Sruthi Shankar
    Oct 18 (Reuters) - The Brazilian real was on track to post
its biggest percentage gain in six weeks on Monday as the dollar
came under pressure ahead of a crucial parliamentary vote on
Brexit, while Latin American stocks followed Wall Street lower.
    The real jumped 1.2% to 4.19 per dollar, reversing
much of this week's losses made on expectations of deeper
interest rate cuts after a clutch of weak data. The currency was
trading close to its 50-day moving average, which, if broken,
could signal more gains for the real.
    "We note that USDBRL flirted with the 4.19 level, but was
once again unable to break 4.20, emphasizing the strong
resistance at this level," Morgan Stanley analysts wrote in a
note.
    "We have started to see some other green shoots in the
economy and the recent trade developments signal a potential
improvement in the global environment."
    Aiding positive moves in Latin American currencies, the
dollar declined against a basket of major currencies as the euro
found favor after Britain and the European Union clinched a deal
on Thursday for an orderly British exit from the bloc.
    However, doubts prevail about the proposed deal getting
through the British parliament in Saturday's vote.
    Mexico's peso hit a new 11-week high to resume its
winning run for a seventh session in eight, with hopes of
ratification of a trade deal between the United States, Canada
and Mexico also playing into the mood. 
    Chile's peso hit its highest level in a month, while
the Colombian peso rose despite weaker oil prices.
    The Argentine peso was little changed. Recent opinion
polls showed Peronist opposition candidate Alberto Fernandez
should beat business-friendly incumbent Mauricio Macri in the
Oct. 27 presidential election by enough to clinch a first-round
win. 
    Regional stocks tracked Wall Street's lackluster moves as
sentiment was dented by data showing the Chinese economy
expanded at its weakest pace in almost 30 years, reinforcing
global growth slowdown fears and reiterating the need for a
U.S.-China trade deal.
    Brazil's Bovespa fell 0.2%. State-controlled lender
Banco do Brasil SA jumped 3.5% after the bank said it
had raised 5.836 billion reais ($1.39 billion) in a secondary
share offering.
    Those were offset by losses by miner Vale and
other steelmakers due to weakness in Dalian iron ore prices.
 
    Shares of Petroleo Brasileiro rose
0.2% after the state oil firm posted a significant production
boost in the third quarter. 
    In Mexico, conglomerate Alfa was among the worst
performers on the IPC index after it reported
double-digit drops in revenue and net profit for the third
quarter.
    State-run oil company Pemex on Thursday released details of
how it will calculate its formula to hedge against upcoming
sales of Maya crude, its flagship grade.
    Pemex sets formulas that dictate the price at which Mexico's
crude is sold worldwide.
    
    
  Key Latin American stock indexes and currencies at 1936 GMT:
    
        Stock indexes                  Latest       Daily %
                                                     change
 MSCI Emerging Markets                    1025.46       -0.28
 MSCI LatAm                               2716.69       -0.13
 Brazil Bovespa                         104807.74        -0.2
 Mexico IPC                              43197.99       -0.65
 Chile IPSA                               5192.39        0.39
 Argentina MerVal                        31888.45      -0.333
 Colombia IGBC                           12804.58       -0.39
                                                             
           Currencies                  Latest       Daily %
                                                     change
 Brazil real                               4.1160        1.29
 Mexico peso                              19.1315        0.32
 Chile peso                                   709        0.34
 Colombia peso                             3424.5        0.70
 Peru sol                                   3.336        0.39
 Argentina peso (interbank)               58.3460       -0.04
                                                   
 
 (Reporting by Sruthi Shankar in Bengaluru; Editing by Daniel
Wallis)
  
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