August 20, 2018 / 3:38 PM / 3 months ago

EMERGING MARKETS-Brazil currency leads losses after presidential poll

    By Bruno Federowski
    BRASILIA, Aug 20 (Reuters) - The Brazilian real led losses
among Latin American currencies on Monday after an opinion poll
showed the market's preferred candidate in October's
presidential elections lagging far behind his rivals.
    Geraldo Alckmin, a center-right establishment politician
backed by a broad centrist coalition, has only 4.9 percent of
voting intentions, according to the survey by CNT/MDA.
    Jailed Former President Luiz Inácio Lula da Silva, who has
railed against austerity even as the fiscal deficit balloons,
has received increased support and would win the vote if allowed
to run for office, the poll showed, followed by far-right
candidate Jair Bolsonaro.
    Investors say bringing back Brazil's investment-grade status
hinges on pursuing structural reforms to stem the growth of
public debt, a scenario that is looking increasingly unlikely.
    Ricardo Gomes da Silva, head of currency trading at
Correparti brokerage in São Paulo, said Brazilian markets will
probably sell off whenever polls show Alckmin losing favor
relative to other candidates.
    The nation's benchmark Bovespa stock index, however,
fell only slightly as rising iron ore prices helped lift shares
of miners and steelmakers, such as Vale SA and Cia
Siderúrgica Nacional SA.
    Also helping boost shares in CSN, as the steelmaker is
known, was an announcement on Friday that it will pay 890
million reais in extraordinary dividends.
    Other emerging market currencies also traded lower as
investors took a cautious stance ahead of meetings between the
United States and China later this week. Trade tensions between
the world's top two economies have dented demand for risky
assets in recent months.
    
    Key Latin American stock indexes and currencies at 1520 GMT:
 Stock indexes                                daily    YTD %
                                                  %   change
                                   Latest    change  
 MSCI Emerging Markets              1033.21       1    -11.7
 MSCI LatAm                         2498.60   -0.09   -11.57
 Brazil Bovespa                    75801.32    -0.3    -0.79
 Mexico IPC                        48659.66    0.82    -1.41
 Argentina MerVal                  26238.82    -2.6   -12.73
 Colombia IGBC                     12074.71    0.22     6.19
                                                            
 Currencies                                   daily    YTD %
                                                  %   change
                                             change  
                                     Latest          
 Brazil real                         3.9433   -0.76   -15.98
 Mexico peso                        18.9990   -0.59     3.68
 Chile peso                           671.8   -0.52    -8.51
 Peru sol                             3.315   -0.12    -2.35
 Argentina peso (interbank)         29.8400   -0.13   -37.67
                                                     
 Argentina peso (parallel)             29.8   -0.50   -35.47
                                                     
 
 (Reporting by Bruno Federowski
Additional reporting by Claudia Violante, in São Paulo
Editing by Jonathan Oatis)
  
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