August 8, 2019 / 2:00 PM / a month ago

EMERGING MARKETS-China relief helps Latam FX rise, Brazil's pension reforms eyed

    Aug 8 (Reuters) - Latin American currencies broadly firmed
against the dollar on Thursday, as surprisingly upbeat trade
data from China and hints that Beijing officials will limit
losses in the yuan eased growth worries for now.
    After reeling from worries in the past week about an
escalating U.S.-China trade war denting global growth, emerging
markets and other risk assets breathed a sigh of relief after
trade data showed July exports grew more than expected in China
amid U.S. tariff pressure.
    Signs that the People's Bank of China was stepping in to
stabilize the yuan also helped bring some poise to the markets.

    "The PBOC set the dollar's reference rate above CNY 7.0, but
not as high as anticipated, and this has seen the yuan
strengthen modestly today," said Marc Chandler, chief market
strategist at Bannockburn Global Forex.
    Brazil's real rose about 0.5%, indicating optimism
after the lower house of Congress on Wednesday approved a
far-reaching pension overhaul bill, which now has to be passed
by the Senate.
    The bill raises the minimum retirement age and reduces some
workers' benefits, lowering the cost of a generous social
security system that has become unsustainable and was fueling
Brazil's rising public debt.
    Sao Paulo-listed shares gained 0.7%, boosted by
miner Vale and state-owned oil company Petrobras
, which sold its entire oil hedge position amid a
sharp fall in crude prices.
    The biggest gainer was Brazil's No. 3 airline, Azul SA
, up 3% after it beat profit expectations in the
second quarter.
    State-controlled Banco do Brasil SA gained more
than 1.5% after posting a surge in second-quarter recurring net
income, helped by lower operating expenses and higher fee
income.
    The Mexican peso also edged higher after data showed
consumer prices rose 3.78% in the year through July, with the
pace of increases slowing for a third straight month and raising
the chances of interest rate cuts.
    A Reuters poll showed Mexico's peso is weakening due to
increasing global trade tensions and is expected to trade at
19.66 per dollar in one year, 0.4% weaker than July's survey.

    The Colombian peso posted the biggest gains among the
region's currencies as prices of oil, the country's top export,
rose on expectations of more production cuts. 

    Latin American stock indexes and currencies at 1330 GMT:
    
   Stock indexes           Latest    Daily %
                                     change
 MSCI Emerging Markets       981.41      0.9
                                     
 MSCI LatAm                 2741.45     0.96
                                     
 Brazil Bovespa           103438.94     0.64
                                     
 Mexico IPC                    0.00        -
                                     
 Chile IPSA                 4811.07        -
                                     
 Argentina MerVal              0.00        -
                                     
 Colombia IGBC             12328.00        -
                                     
                                            
      Currencies           Latest    Daily %
                                     change
 Brazil real                 3.9491     0.64
                                     
 Mexico peso                19.5856     0.18
                                     
 Chile peso                   712.6     0.20
                                     
 Colombia peso              3403.05     1.25
                                     
 Peru sol                     3.388        -
                                     
 Argentina peso             45.4500     0.31
 (interbank)                         
                                     
 

 (Reporting by Sruthi Shankar in Bengaluru; editing by Jonathan
Oatis)
  
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