July 3, 2019 / 2:26 PM / 13 days ago

EMERGING MARKETS-Latam FX steady as investors gauge Lagarde's nomination to head ECB

    By Susan Mathew
    July 3 (Reuters) - Amid growth worries, Latin American
currencies were quiet against a steady dollar on Wednesday as
investors gauged the implications of the nomination of the IMF's
Christine Lagarde to head the European Central Bank.
    Markets are hoping that International Monetary Fund head
Lagarde will maintain the ECB's recent dovish tone, which was
echoed by the U.S. Federal Reserve, and had spurred inflows into
riskier assets last month.
    The nomination of Lagarde is a big surprise, wrote Mark
McCormick, global head of FX strategy at TD Securities. 
    "Still, we note the impact has been muted, mostly reflecting
the fact that markets have insufficient information to
stereotype her expected policy lean." 
    Signals that the United States may be backtracking on its
promise to reduce restrictions on Chinese tech giant Huawei and
fresh tariffs threats on the European Union on Tuesday had
investors worried that the recent slew of poor manufacturing
data from across the globe is here to stay.
    While the currencies of Mexico and Chile
barely moved, higher oil prices helped crude exporter Colombia's
peso add 0.1%.
    Brazil's real swung between gains and losses with
data showing the country's services sector activity shrank in
June for the third month in a row - the clearest warning sign
yet that the economy may have slipped back into recession,
adding pressure to pass pension reforms seen as crucial in
shoring up the economy. 
    Investors are hoping that the bill can be put to vote in the
Lower House before the congressional recess begins on July 18,
but the final version to be voted on by the House is yet to be
passed by a special congressional committee.
    Sao Paulo-traded stocks rose 0.5% on broad-based
gains with financial and consumer stocks leading gains. Stocks
in Chile also rose, in line with world stocks.

    
    Key Latin American stock indexes and currencies at 1356 GMT:
    Stock indexes             Latest    Daily %
                                         change
 MSCI Emerging Markets         1058.41     -0.49
                                        
 MSCI LatAm                    2848.22       0.6
                                        
 Brazil Bovespa              101097.08      0.49
                                        
 Mexico IPC                   43433.16     -0.02
                                        
 Chile IPSA                    5026.70      0.34
                                        
 Argentina MerVal                    -         -
                                        
 Colombia IGBC                12551.07     -0.06
                                        
                                                
       Currencies             Latest    Daily %
                                         change
 Brazil real                    3.8402      0.35
                                        
 Mexico peso                   19.0305      0.11
                                        
 Chile peso                     680.32     -0.08
                                        
 Colombia peso                 3206.18     -0.02
 Peru sol                            -         -
                                        
 Argentina peso                      -         -
 (interbank)                            
                                        
 
 (Reporting by Susan Mathew in Bengaluru;
Editing by Alistair Bell)
  
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