January 9, 2015 / 8:58 PM / 4 years ago

EMERGING MARKETS-Brazil, Mexico currencies gain on U.S. jobs data

RIO DE JANEIRO, Jan 9 (Reuters) - The currencies of Brazil
and Mexico strengthened on Friday after data showed U.S. wages
unexpectedly fell in December, increasing expectations that the
Federal Reserve will be "patient" before raising interest rates.
    Brazilian stocks led declines in Latin America, however,
amid losses in the power sector and a selloff on Wall Street.
Shares of Brazilian power distributors slumped on concern about
rising costs after a prolonged drought caused hydroelectricity
prices to soar.
    The Brazilian real closed 1.3 percent stronger while
the Mexican peso climbed 0.5 percent after a report
showed U.S. workers' earnings dropped even as employers
continued to add jobs in December. 
    "It's clear that the market doesn't have to worry about
higher U.S. rates at least for a few months," said Reginaldo
Siaca, head of currency trading at TOV brokerage in Brazil.
    An expected rise in U.S. interest rates will be one of the
main challenges for Latin American markets this year as many
investors will likely ditch emerging markets in favor of U.S.
    The Colombian peso lost 0.8 percent as oil prices
resumed their slide, clouding the economic outlook for the
oil-exporting country.
    In equity markets, Brazil's benchmark Bovespa index 
lost 2.2 percent as shares of power utilities Tractebel
, Light, Eletrobras dropped at
least 7 percent.
    Power utilities' costs have soared in Brazil as the worst
drought in 80 years drove hydroelectricity prices sharply
higher. Much of the industry would already be bankrupt if the
government had not provided them with 17.8 billion reais ($6.76
billion) worth of emergency credit last year.
    Now, Brazil's state development bank BNDES is willing to
make another emergency loan to electricity distributors as long
as two other state-run lenders join the operation, a senior bank
executive told Reuters. 
    Key Latin American stock indexes and currencies at 2030 GMT:
 Stock indexes                   daily %    YTD %
                                  change   change
 MSCI Emerging            962.3     0.36     0.26
 MSCI LatAm             2687.35    -0.04    -1.44
 Brazil Bovespa        48840.25    -2.21    -2.33
 Mexico IPC            42443.13      0.1    -1.63
 Chile IPSA             3783.06    -0.07    -1.76
 Chile IGPA            18608.54    -0.06    -1.39
 Argentina MerVal      8459.649     0.76    -1.39
 Colombia IGBC         10934.55    -0.22    -6.02
 Peru IGRA             14419.52    -0.09    -2.53
 Venezuela IBC          3950.49    -0.09     2.38
 Currencies                      daily %    YTD %
                                  change   change
 Brazil real             2.6375     1.29     0.76
 Mexico peso            14.6012     0.47     0.98
 Chile peso                 615    -0.41    -1.40
 Colombia peso             2416    -0.81    -1.16
 Peru sol                 2.987    -0.23    -0.27
 Argentina peso          8.5900     0.03    -0.47
 Argentina peso           13.72     0.36     2.04
 (Reporting by Bruno Federowski and Walter Brandimarte; Editing
by Nick Zieminski)
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