By Bruno Federowski
SAO PAULO, June 12 Brazil's stocks and currency
slipped on Monday as traders feared lengthy legal proceedings
against President Michel Temer could further delay the
implementation of his reform agenda.
The top electoral court on Friday dismissed a case that
threatened to unseat Temer, giving him some breathing room but
potentially lengthening a political crisis. Temer is being
investigated separately by federal prosecutors for corruption,
obstruction of justice and racketeering.
Brazilian markets have sold off since the scandal broke last
month as questions grew over the future of Temer's planned
reforms of the country's pension system and labor regulations.
The Brazilian real slipped 0.59 percent on Monday
after weakening nearly 5 percent since May 18, when reports
emerged that Temer was caught on tape allegedly condoning bribes
to silence a key witness in a corruption case.
The benchmark Bovespa stock index fell 0.82 percent,
weighed down by blue-chip shares, including lenders Banco
Bradesco SA and Itaú Unibanco Holding SA
and miner Vale SA.
Also fueling caution was the Federal Reserve's policy
meeting this week, when the U.S. central bank is expected to
hike benchmark interest rates.
Still, a mixed batch of U.S. economic data has cooled bets
on further hikes, with traders looking to the Fed's policy
statement for clues on the pace of future tightening.
The Mexican peso gained 0.22 percent after notching
a 10-month high last week, while the Chilean peso
firmed 0.33 percent to end the day at its highest level in eight
(Reporting by Bruno Federowski; Editing by Dan Grebler, G