November 19, 2019 / 7:33 PM / 8 months ago

EMERGING MARKETS-Latam FX slips on trade uncertainty, Brazil's real eases off record lows

    * U.S.-China trade jitters weigh on sentiment
    * Mexican peso, Peruvian sol dip
    * Brazil real firms after five day slide to record low

 (Updates prices, adds news items)
    By Medha Singh and Shreyashi   Sanyal
    Nov 19 (Reuters) - Most Latin American currencies were lower
on Tuesday as lack of clarity on U.S.-China trade developments
kept investors on the sidelines but Brazil's real bounced off
all time lows.
    The real firmed about 0.5% after the currency crossed
a key mark at 4.20 to the dollar to hit a record low in the
previous session when there was no central bank intervention. 
     Central bank chief Roberto Campos Neto said on Tuesday the
exchange rate was not fueling inflation or inflation
expectations, indicating policymakers were relatively relaxed
and that intervention was not imminent.
    The bank was due to sell up to $600 million through reverse
currency swaps on Tuesday, but later canceled the auction ahead
of a market holiday on Wednesday.
    "From a purely fundamental perspective, the real is
undervalued at the moment, but the key thing is that it rose
above 4.20," said Christian Lawrence, senior market strategist,
LatAm FX at Rabobank in New York.
    Debate around the central bank's FX intervention policy has
intensified since it sold dollars in the spot market in August
for the first time in over a decade, indicating a willingness to
chip away at its mountain of reserves.
    Brazil's stock index was down 0.4% in subdued
trading, weighed down by financial stocks, while Mexico shares
 were up marginally after a market holiday on Monday.
    Chile's currency and stocks resumed their
slide after a brief reprieve on Friday, when lawmakers agreed to
hold a referendum to replace a dictatorship-era constitution.
    "People are just being cautious because we haven't seen this
kind of social unrest in Chile and it is worrisome (since) we
don't know where things are going to go from here," said
Christian Lawrence. 
    An index of Latin American currencies was
down 0.3% with the Mexican peso and Peruvian sol
slipping against a steady dollar, as conflicting comments
surrounding the trade talks kept investors on the
 Key Latin American stock indexes and currencies at 1912 GMT: 
 Stock indexes                                daily % change
 MSCI Emerging Markets               1056.64            0.43
 MSCI LatAm                          2659.45           -0.74
 Brazil Bovespa                    105799.95           -0.44
 Mexico IPC                         43432.69            0.09
 Chile IPSA                          4792.27           -0.45
 Argentina MerVal                   31856.19           0.014
 Colombia IGBC                             -               -
 Currencies                                   daily % change
 Brazil real                          4.2004            0.52
 Mexico peso                         19.3530           -0.21
 Chile peso                              787           -1.83
 Colombia peso                        3437.1            0.06
 Peru sol                              3.376           -0.12
 Argentina peso                      59.6900           -0.02


 (Reporting by Medha Singh and Shreyashi Sanyal in Bengaluru;
Editing by Tom Brown)
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