October 11, 2018 / 3:48 PM / 2 months ago

EMERGING MARKETS-Most Latam currencies firm as dollar eases on U.S. data

    By Susan Mathew
    Oct 11 (Reuters) - Most Latin American currencies firmed on
Thursday, with Mexico's peso rising for the first time in four
sessions, as the dollar eased and as a lower-than-expected
reading on U.S. inflation signaled the Federal Reserve would
continue a gradual pace of rate hikes.
    U.S. consumer prices rose less than expected in September,
held back by a slower increase in the cost of rent and falling
energy prices, as underlying inflation pressures appeared to
cool slightly.
    "The dollar weakened, and the inflation data disappointed 
which has dampened hopes of a more aggressive rate rise pace (by
the Fed)," said Thulan Nguyen, a senior FX strategist at
Commerzbank.
    The Mexican peso climbed 0.5 percent, and was among
the region's strongest gainers. The MSCI emerging market
currency index was 0.1 percent higher as most
other developing market currencies rose against the dollar.

    After snapping a seven-day winning streak in the previous
session, Brazil's real was little changed, trimming early
gains after a poll that showed presidential front-runner and
market-favorite Jair Bolsonaro had built up a significant lead
to win the run-off vote. 
    Sao Paulo's Bovespa stock index pared early gains
and was 0.3 percent lower. State-run utility Eletrobras fell for
a second straight day on mixed messages from the Bolsonaro camp
about privatizing it.
    The Argentine peso strengthened after dropping in the
previous session on fears that the central bank would increase
its indebtedness as it sells short-term notes at sky-high rates
to soak up peso liquidity.
    Other stock markets in the region also fell, with
Argentina's Merval index touching its lowest in a month,
mirroring developing market stocks which fell after a sell-off
in Wall Street in the previous session. U.S. stocks continued
their slide in this session.
            
    Key Latin American stock indexes and currencies at 1500 GMT
 Stock indexes                          daily %  YTD % change
                                         change  
                             Latest              
 MSCI Emerging Markets          985.67    -0.84        -14.91
                                                 
 MSCI LatAm                    2691.97    -2.25         -4.82
                                                 
 Brazil Bovespa               83601.83    -0.09          9.42
                                                 
 Mexico IPC                   47839.21    -0.62         -3.07
                                                 
 Chile IPSA                    5128.31       -2         -2.00
                                                 
 Argentina MerVal             28164.69    -1.35         -6.32
                                                 
 Colombia IGBC                12267.35    -1.14          7.89
                                                 
                                                             
 Currencies                             daily %  YTD % change
                                         change  
                                Latest           
 Brazil real                    3.7615     0.01        -11.92
                                                 
 Mexico peso                   19.0660     0.47          3.32
                                                 
 Chile peso                      683.4     0.64        -10.06
                                                 
 Colombia peso                 3092.45     0.02         -3.57
 Peru sol                         3.33    -0.06         -2.79
                                                 
 Argentina peso (interbank)    36.8800     1.00        -49.57
                                                 
 Argentina peso (parallel)          37     1.35        -48.03
                                                 
 

 (Reporting by Susan Mathew in Bengaluru;
Editing by Susan Thomas)
  
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