July 21, 2020 / 3:02 PM / 16 days ago

EMERGING MARKETS-Brazil's real hits one-month high, stimulus hopes lift mood

    * Brazil's real at one-month high after aid to small
    * Investors cheer massive EU stimulus plan
    * U.S. Congress, White House to meet on coronavirus aid
    * Argentina creditors close ranks on debt deal as government

    By Shreyashi Sanyal
    July 21 (Reuters) - Brazil's real jumped to a one-month high
on Tuesday after the central bank announced aid to small and
medium businesses, while investors around the world cheered a
massive stimulus plan from the European Union.  
    The real leaped as the central bank launched a
program aimed at providing up to 120 billion reais ($23 billion)
in loans to small and medium-sized enterprises, which have
struggled to access credit during the COVID-19 pandemic.

    Commodity-linked currencies, including the Chilean
and Mexican pesos, firmed 0.9% each against the U.S.
dollar, which hit a four-month low.
    Global markets cheered an historic deal by European Union
leaders on a massive stimulus plan for their coronavirus-hit
economies in the early hours of Tuesday.
    "Fiscal policy remains the center of attention, reflecting
the broader push toward growth-enhancing policies in the wake of
COVID," said Mark McCormick, global head of FX strategy at TD
    "This global factor underscores that local stories have
given way to broader themes." 
    Advisers to U.S. President Donald Trump and congressional
Democrats were set to discuss the next steps in responding to
the coronavirus crisis on Tuesday, with congressional
Republicans saying they were working on a $1 trillion relief
    Latin American risk assets carried their positive momentum
from the previous session, fueled by early data from promising
trials of three potential coronavirus vaccines released on
Monday, including a closely watched candidate from Oxford
    Brazilian state-owned oil company Petrobras
gained 3.4% after it agreed to sell its remaining 10% stake in
natural gas pipeline company TAG to Engie Brasil and
Canadian investment fund Caisse de Depot et Placement du Quebec
late on Monday.
    Argentina's peso was rangebound after the government
rejected a counterproposal from the country's three main
creditor groups on Monday to revamp around $65 billion in
foreign debt, doubling down on its own "final" offer as
bondholders appeared to close ranks.
    However, analysts say the country and its creditors are
likely to find a way to seal a debt restructuring deal despite
the standoff.
    Ecuador pushed forward with its debt overhaul plans on
Monday, requesting a vote among its creditors on reconfiguring
the terms of $17.4 billion of its external bonds, with its
largest group of creditors backing the proposal.   
    Key Latin American stock indexes and currencies;
     Stock indexes               Latest        Daily %
 MSCI Emerging Markets              1087.01          2.11
 MSCI LatAm                         2062.32          2.12
 Brazil Bovespa                   104210.14         -0.21
 Mexico IPC                        36697.88          1.03
 Chile IPSA                         3928.98          0.11
 Argentina MerVal                  46344.62         1.448
 Colombia COLCAP                    1157.65          0.13
        Currencies               Latest        Daily %
 Brazil real                         5.2263          2.18
 Mexico peso                        22.3928          0.38
 Chile peso                           778.7          0.73
 Colombia peso                       3631.2          0.32
 Peru sol                            3.4917          0.32
 Argentina peso (interbank)         71.7100         -0.07
 Argentina peso (parallel)              126          3.17

 (Reporting by Shreyashi Sanyal in Bengaluru; Editing by Dan
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