February 25, 2019 / 9:54 PM / 3 months ago

EMERGING MARKETS-Latam currencies steady on trade optimism; growth outlook weighs on stocks

 (Recasts throughout, updates prices)
    By Agamoni Ghosh
    Feb 25 (Reuters) - Most Latin American currencies steadied
on Monday as investors shifted from the safe-haven dollar after
the United States extended a tariff relaxation on Chinese
imports, a step closer to resolving trade disputes.
    Global equities cheered U.S. President Donald Trump saying
that he would delay a planned hike in tariffs, raising hopes of
an actual deal likely to materialize soon and end the trade
standoff that has roiled the markets for months.  
    MSCI's index for stocks in Latin America
however, fell 0.3 percent, bucking a global trend after sets of
data for Brazil and Mexico aided by tepid growth forecast by
Goldman Sachs for the region weighed on sentiment.
    Goldman Sachs cut its economic growth forecasts for key
Latin American countries and lowered the outlook for official
interest rates across the region on Monday, citing weak domestic
momentum and a deterioration in the global picture.
    "The late 2018 and early 2019 growth momentum has been
weaker than expected across a number of the large economies —
Argentina, Brazil, and Mexico," Goldman's New York-based team of
Latin American economists wrote in a note on Monday. 
    The dollar's weakness helped Brazil's real chalk up
heavy gains earlier in the session but a slump in oil prices
dragged the currency down. 
    Stocks in Sao Paulo's Bovespa index also fell,
dragged by shares of Petrobras and banks and after
data showed current account deficit widened slightly and foreign
investment slowed sharply in January compared with the same
month a year earlier.
    Material stocks emerged as the lone gainer on the index
buoying on trade optimism led by steelmaker Sid Nacional
    Mexico's peso rose marginally, while stocks 
fell 0.2 percent after data showed the economy grew less than
first estimated in the fourth quarter as activity contracted in
December, the first month of President Andres Manuel Lopez
Obrador's administration.
    Chile's peso rose to its highest level since August
2018, favored by an advance in the price of copper, while stocks
on the IPSA index ended 0.8 percent lower but
hovered around five-month highs. 
    Argentina's stocks benchmark fell 0.8 percent, while
the country's peso firmed against a weak dollar. 
    Colombian stocks were the only exception on the
region, climbing to three-month highs while the peso rose
0.6 percent.
    Latin American stock indexes and currencies at GMT 2140 GMT
 Stock indexes                             daily %
                               Latest       change
 MSCI Emerging Markets           1067.64      0.85
 MSCI LatAm                      2891.92     -0.34
 Brazil Bovespa                 97239.90     -0.66
 Mexico IPC                     43664.33     -0.17
 Chile IPSA                      5479.69     -0.08
 Argentina MerVal               36332.03     -0.86
 Colombia IGBC                  12227.77      1.19
 Currencies                                daily %
 Brazil real                      3.7472     -0.12
 Mexico peso                     19.1418      0.03
 Chile peso                       650.15      0.16
 Colombia peso                    3101.5      0.16
 Peru sol                          3.304      0.06
 Argentina peso (interbank)      39.0200      0.46

 (Reporting by Agamoni Ghosh in Bengaluru; Additional reporting
by Jamie McGeever; editing by Grant McCool)
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