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EMERGING MARKETS-Brazil's real resumes decline; other Latam currencies gain
March 12, 2015 / 8:22 PM / 3 years ago

EMERGING MARKETS-Brazil's real resumes decline; other Latam currencies gain

RIO DE JANEIRO, March 12 (Reuters) - The Brazilian real
resumed its weakening trend late on Thursday, even as other key
Latin American currencies posted gains, with investors worried
about Brazil's fiscal problems and the future of a central bank
program of forex intervention.
    The real closed 1 percent lower after posting gains
of more than 1 percent right after markets opened.
    By contrast, the Mexican peso and the Chilean peso
 climbed 0.4 percent and 0.9 percent, respectively, as the
U.S. dollar rally stalled globally.
    The real was unable to benefit from the respite in global
foreign exchange markets as investors worried about President
Dilma Rousseff's ability to pass fiscal austerity measures at a 
time when her popularity is dropping and her Congress coalition
is weakening. 
    Without fiscal adjustments, Brazil risks additional
downgrades of its sovereign credit rating in the next few
months.
    Doubts about whether Brazil's central bank will extend its
program of daily sales of currency swaps, which is scheduled to
end at the end of March, also put pressure on the real. 
    Many investors believe the central bank may scrap the
program, which provides investors with a currency hedge, as the
bank lets the currency weaken further to correct Brazil's
current account deficit.
    "Before, you had the central bank supporting the currency
with difficulty. Now it seems that it will allow the real to
weaken as much as necessary to fix the economy," said a trader
in Brazil.

    Key Latin American stock indexes and currencies at 2007 GMT
 Stock indexes                   daily %    YTD %
                                  change   change
                      Latest              
 MSCI Emerging           947.16     0.44    -1.39
 Markets                                  
 MSCI LatAm             2394.63    -0.37   -11.89
                                          
 Brazil Bovespa        48870.73    -0.07    -2.27
                                          
 Mexico IPC            44055.89     1.92     2.11
                                          
 Chile IPSA             3873.52     0.16     0.59
                                          
 Chile IGPA            18905.64     0.12     0.19
                                          
 Argentina MerVal     10098.609    -0.32    17.71
                                          
 Colombia IGBC          9700.09     1.86   -16.63
                                          
 Peru IGRA             12631.18     0.36   -14.62
                                          
 Venezuela IBC          4545.35      4.8    17.79
                                          
                                                 
 Currencies                      daily %    YTD %
                                  change   change
                         Latest           
 Brazil real             3.1590    -1.03   -15.88
                                          
 Mexico peso            15.4242     0.46    -4.41
                                          
 Chile peso              632.75     0.87    -4.16
                                          
 Colombia peso           2626.5    -0.10    -9.08
                                          
 Peru sol                 3.099    -0.10    -3.87
                                          
 Argentina peso          8.7775     0.00    -2.59
 (interbank)                              
                                          
 Argentina peso           12.87    -0.39     8.78
 (parallel)                               
                                          
 
 (Reporting by Bruno Federowski and Walter Brandimarte; Editing
by Peter Galloway)

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