August 20, 2019 / 2:55 PM / a month ago

EMERGING MARKETS-Argentina in red again, lagging steady Latam markets

    By Sruthi Shankar
    Aug 20 (Reuters) - Most Latin American currencies edged
higher on Tuesday as investors speculated the path of U.S.
interest rates amid growing signs that policymakers are willing
to do more to stimulate their slowing economies.
    Bucking the trend, Argentina's peso shed over 1% even
as the new Treasury Minister Hernan Lacunza sought to calm
investors by saying the country will stand by the 2019 fiscal
targets agreed with the International Monetary Fund, and work to
stabilize its currency.
    After a tumultuous week marked by worries about escalation
in U.S.-China trade tension, recession worries and a slump in
Argentina's assets, financial markets steadied as major
economies including China and Germany unveiled plans to support
growth.
    With the U.S. dollar slipping, the Brazilian real and
the Mexican peso rose about 0.6% as investors focused on 
minutes from the U.S. Federal Reserve's July meeting and the
central bankers' meeting at Jackson Hole later this week, where
Fed chief Jerome Powell is set to speak.
    "High expectations for monetary easing persist for upcoming
Fed and ECB meetings," Morgan Stanley analysts wrote in a note.
    "Fed's Powell may have to wait for weaker global demand for
U.S. exports and trade uncertainty to spill over into the
domestic consumer sector before turning decisively dovish."
    Argentine investors returned from a holiday to continue
selling the battered currency after former Treasury Minister
Nicolas Dujovne resigned over the weekend following a downgrade
on the country's sovereign debt by rating agencies Fitch and
S&P.
    "Potentially, this new guy will be in office for only three
months, so I don't think he'll be able to do much. I don't see
his appointment as having much impact on the election," said
Edward Glossop, Latin America economist at Capital Economics.
    "It's a job where he has his hands tied by the IMF framework
as Argentina has fiscal goals it needs to reach and Lacunza
doesn't have much discretion to loosen monetary policy."
    Keeping investors on edge, Argentine central bank chief
Guido Sandleris said the country could face a fresh rise in
inflation due to the recent free-fall in the peso, which has
shed about 18% since a shock defeat for business-friendly
President Mauricio Macri in Aug. 11 primaries. 
    Argentina's main stock index fell more than 8%,
while Brazil's Bovepsa and Mexico's IPC edged
slightly lower.
    
    Latin American stock indexes and currencies at 1430 GMT:
    
 Stock indexes                        daily %
                             Latest    change
 MSCI Emerging Markets        980.45     0.28
                                      
 MSCI LatAm                  2581.70     0.06
                                      
 Brazil Bovespa             99325.00    -0.14
                                      
 Mexico IPC                 39701.51     0.37
                                      
 Chile IPSA                  4779.92    -0.15
                                      
 Argentina MerVal           27905.53    -8.23
                                      
 Colombia IGBC              12559.08     0.25
                                      
                                             
 Currencies                           daily %
                                       change
                              Latest  
 Brazil real                  4.0404     0.65
                                      
 Mexico peso                 19.7436     0.56
                                      
 Chile peso                    709.7     0.51
                                      
 Colombia peso               3413.16     0.59
 Peru sol                      3.381     0.15
                                      
 Argentina peso              55.5700    -1.03
 (interbank)                          
                                      
 
 (Reporting by Sruthi Shankar in Bengaluru, additional reporting
by Tom Arnold in London
Editing by Nick Zieminski)
  
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