April 17, 2017 / 10:41 PM / 9 months ago

EMERGING MARKETS-Brazil currency firms after central bank intervention

    MEXICO CITY, April 17 (Reuters) - The Brazilian real firmed
on Monday as the central bank stepped up intervention, while the
view that the government will stick to its plans to push a
pension overhaul also helped to boost the currency as well as
local stocks.
    The real firmed 1.35 percent against the dollar to
its strongest level in nearly two weeks after the central bank
sold $800 million worth of currency swaps, which function like
dollar sales to investors for future delivery, to roll over
contracts expiring next month.
    Should the bank maintain that pace of sales daily until the
end of the month, it will fully roll over $6.4 billion worth of
swaps set to mature on March 2. The central bank currently holds
around $17.7 billion worth of swaps on its balance sheet.
    Meanwhile, lawmakers who attended a meeting with Brazilian
President Michel Temer on Sunday said he was sticking with his
plans to push the pension overhaul through Congress by July.

    The proposed pension reform is a cornerstone of Temer's plan
to restore fiscal discipline and bolster investor confidence to
spark a recovery, but it remains unpopular among Brazilians,
many of whom would have to work longer before retirement.
    Brazil's benchmark Bovespa stock index jumped 2.5
percent on Monday, the biggest gain among the region's bourses.
    Despite the gains in Brazil, escalating tension between the
United States and North Korea, depressed investor appetite for
higher-yielding, emerging market assets.
    A day after a failed missile test by North Korea, U.S. Vice
President Mike Pence on Monday warned that recent U.S. military
strikes in Syria and Afghanistan show that the resolve of
President Donald Trump should not be tested.
    The news led other Latin American currencies to seesaw, with
the Mexican peso slipping from a five-month peak,
though Chile's peso followed copper prices higher.

  Key Latin American stock indexes and currencies at 2000 GMT:
 Stock indexes                  Latest      Daily   YTD pct
                                             pct    change
 MSCI Emerging Markets             963.33      0.3    11.38
 MSCI LatAm                      2,655.15      1.9    11.32
 Brazil Bovespa                 64,394.78      2.5     6.92
 Mexico IPC                     49,007.81     0.11     7.37
 Chile IPSA                      4,860.48     0.04    17.08
 Chile IGPA                     24,376.56     0.07    17.57
 Argentina MerVal               20,723.16    -0.42    22.49
 Colombia IGBC                  10,174.39    -0.74     0.46
 Venezuela IBC                  47,329.03     0.64    49.28
 Currencies                     Latest      Daily   YTD pct
                                             pct    change
 Brazil real                       3.1035     1.35     4.69
 Mexico peso                      18.5090    -0.06    12.08
 Chile peso                         645.7     0.69     3.87
 Colombia peso                   2,850.68     0.50     5.29
 Peru sol                            3.25     0.12     5.05
 Argentina peso (interbank)       15.1950    -0.03     4.48
 Argentina peso (parallel)          15.86    -1.07     6.05
 (Reporting by Anthony Esposito, editing by G Crosse)
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below