January 10, 2019 / 2:54 PM / 2 months ago

EMERGING MARKETS-Latam FX fails to gain versus weak dollar; stocks dip

    By Aaron Saldanha
    Jan 10 (Reuters) - Latin American currencies failed to take
advantage of a soft dollar on Thursday, consolidating gains made
after the prior day's release of the U.S. Federal Reserve's
December meeting minutes, while Latin American stocks eased as
hopes of a concrete U.S.-China trade deal dimmed.  
    The Fed minutes were perceived by markets to be dovish, and
sparked strong performance in emerging markets in Latin America
and beyond, whose currencies benefit from a weak greenback.
    "We are also in the weaker U.S. dollar camp," even though
bigger moves in emerging market foreign exchange need to wait
for stronger data from China, Citigroup Head of Emerging Market
strategy Dirk Willer and Emerging Markets FX Strategist Kenneth
Lam wrote in a note.
    Producer prices in China, a significant market for Latin
America's resources exports, in December rose at their slowest
pace since September 2016 as factories confronted a slowdown in
demand, according to data released on Thursday.    
    MSCI's index of Latin American stocks was
0.2 percent lower, slipping away from a more than 7-1/2-month
peak hit on Wednesday. It had soared over 15 percent from a low
a little more than two weeks ago.
    Brazil's real softened 0.1 percent, giving back a
sliver of the around 6.4 percent it surged in the year through
Wednesday, following the swearing-in of President Jair Bolsonaro
and signs of a potential easing in the U.S.-China trade war.
    The country's Bovespa stocks index dropped half a
percent, giving back a chunk of Wednesday's 1.7 percent jump.
    Mining power Vale SA - also a heavyweight on the
MSCI index for the region - dropped 1.8 percent, retreating from
an over one-month peak hit on Wednesday.
    A 1 percent fall in global oil prices boded ill for
Brazilian energy stocks, with common shares of state-run oil
firm Petroleo Brasileiro SA sliding 1.2 percent.

    Chile's main stocks index was a touch higher
but its peso softened 0.4 percent as prices of copper -
its key export - slipped, amid fading trade optimism.   
    
    The currency had jumped over 3.6 percent from a trough
plumbed a week ago, buoyed as copper prices gained on hopes of a
U.S.-China trade deal.      
    Argentina's peso weakened, as did Peru's sol. 
       
    
    
    Key Latin American stock indexes and currencies at 1412 GMT
    
 Stock indexes                           daily %
                             Latest       change
 MSCI Emerging Markets          997.18      0.28
                                        
 MSCI LatAm                    2817.36     -0.23
                                        
 Brazil Bovespa               93170.01     -0.47
                                        
 Mexico IPC                          -         -
                                        
 Chile IPSA                    5267.93      0.06
                                        
 Argentina MerVal                    -         -
                                        
 Colombia IGBC                       -         -
                                        
                                                
 Currencies                              daily %
                                          change
                                Latest  
 Brazil real                    3.6844      0.07
                                        
 Mexico peso                   19.1912      0.17
                                        
 Chile peso                      678.8     -0.29
                                        
 Colombia peso                  3140.5     -0.21
 Peru sol                        3.343     -0.15
                                        
 Argentina peso                37.4000     -0.08
 (interbank)                            
                                        
 

    
 (Reporting by Aaron Saldanha in Bengaluru; editing by Jonathan
Oatis)
  
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