By Bruno Federowski
SAO PAULO, Dec 14 The Brazilian real
strengthened for an eighth day on Wednesday ahead of the U.S.
Federal Reserve policy decision, supported by growing bets that
the government will manage to swiftly pass austerity measures.
The Senate approved on Tuesday a constitutional amendment
limiting growth of public spending for the next 20 years, a
victory for President Michel Temer's efforts to curb debt.
A batch of corruption accusations against senior members of
Temer's government, including Temer himself, had stoked concerns
of delays in the approval of fiscal austerity measures.
Also helping lift the real were expectations of corporate
inflows into Brazil after the country's watchdog approved a
transaction transferring control of the stakes that Camargo
Corrêa SA, pension fund Previ and Energia São Paulo FIA had in
CPFL Energia SA to State Grid Corp of China.
The real's recent rally allowed the central bank to reduce
its intervention after selling traditional currency swaps, which
function like dollar sales to investors for future delivery,
daily since Dec. 1.
Other Latin American currencies seesawed before the Fed's
decision later on Wednesday. Traders say an interest rate
increase is fully priced-in, but doubt remains over whether the
U.S. central bank will signal additional hikes through the
Key Latin American stock indexes and currencies at 1455 GMT:
Stock indexes daily % YTD %
Latest change change
MSCI Emerging Markets 874.86 -0.27 10.46
MSCI LatAm 2323.24 -0.49 27.59
Brazil Bovespa 58769.33 -0.86 35.57
Mexico IPC 46598.74 -0.58 8.43
Chile IPSA 4261.89 -0.25 15.81
Chile IGPA 21274.88 -0.24 17.21
Argentina MerVal 17185.76 -0.06 47.20
Colombia IGBC 9945.90 -0.33 16.36
Venezuela IBC 34736.05 -0.73 138.11
Currencies daily % YTD %
Brazil real 3.3166 0.27 19.01
Mexico peso 20.2265 0.28 -14.81
Chile peso 655.1 -0.66 8.33
Colombia peso 2968.39 0.02 6.77
Peru sol 3.394 0.00 0.59
Argentina peso (interbank) 15.8100 1.00 -17.88
Argentina peso (parallel) 16.34 0.12 -12.67
(Reporting by Bruno Federowski; Editing by Nick Zieminski)