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EMERGING MARKETS-Mexico peso down on strong U.S. factory data
July 3, 2017 / 4:02 PM / 5 months ago

EMERGING MARKETS-Mexico peso down on strong U.S. factory data

    SAO PAULO, July 3 (Reuters) - The Mexican peso slipped on
Thursday after U.S. manufacturing activity increased to its
strongest level in nearly three years, driving expectations of
faster rate hikes in coming months.
    An index of national factory activity tracked by the
Institute for Supply Management rose to 57.8 last month, the
strongest reading since August 2014, driving U.S. 10-year yields
to their highest levels in seven weeks.
    The figures allayed some concern over the pace of economic
recovery that had left traders skeptical of the Federal
Reserve's stated plan of raising U.S. rates once more before the
end of 2017 and another three times next year.
    A faster policy tightening could dampen the allure of
high-yielding emerging market assets, weighing down on the value
of their currencies.
    The Mexican peso weakened 0.6 percent, tracking
currencies from other emerging markets lower. Trading volumes
were thin ahead of the U.S. July Fourth holiday on Tuesday.
    The Brazilian real, however, was nearly flat. Traders
cited soothing fears that a corruption scandal could delay
President Michel Temer's agenda of economic structural reforms.
    Brazil's benchmark Bovespa stock index rose 0.4
percent as rising prices of iron ore lifted shares of miner Vale
    Shares of sewage and water utility Cia de Saneamento de
Minas Gerais SA, which are not part of the benchmark
index, soared after regulators allowed the Brazilian water and
sewage utility to raise tariffs by more than expected.

    Latin American stock indexes and currencies at 1550 GMT:
 Stock indexes                                daily %    YTD %
                                     Latest    change   change
 MSCI Emerging Markets               1013.12     0.23    17.23
 MSCI LatAm                          2551.41     0.29     8.69
 Brazil Bovespa                     63162.55     0.42     4.87
 Mexico S&P/BVM IPC                 50062.57     0.41     9.68
 Chile IPSA                          4745.66    -0.03    14.31
 Chile IGPA                         23782.41    -0.02    14.70
 Argentina MerVal                   22158.44     1.32    30.98
 Colombia IGBC                      10891.25     0.43     7.54
 Venezuela IBC                     123355.27      0.1   289.07
 Currencies                                   daily %    YTD %
                                               change   change
 Brazil real                          3.3020     0.31    -1.60
 Mexico peso                         18.2365    -0.64    13.75
 Chile peso                            663.7     0.00     1.05
 Colombia peso                          3044    -0.08    -1.40
 Peru sol                              3.246     0.00     5.18
 Argentina peso (interbank)          16.6000    -0.57    -4.37
 Argentina peso (parallel)             16.79    -0.48     0.18

 (Reporting by Bruno Federowski; editing by Grant McCool)

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