July 20, 2018 / 8:27 PM / 5 months ago

EMERGING MARKETS-Brazil's real soars after Trump comments boost LatAm currencies

 (Updates prices)
    By Bruno Federowski
    BRASILIA, July 20 (Reuters) - Latin American currencies,
particularly Brazil's real, strengthened on Friday after
President Donald Trump lamented the strong U.S. dollar, spurring
investors worldwide to lock in profits on the greenback.
    In a CNBC interview on Thursday, Trump criticized the
Federal Reserve's policy on raising interest rates, saying it
eroded the United States' competitive edge, as did a strong
dollar.
    His remarks drove profit-taking on the dollar across
financial markets, sending emerging-market currencies up. Risky
assets like emerging market currencies have taken a beating in
recent weeks amid escalating trade tensions between the United
States and China.
    The Mexican peso firmed 0.06 percent, while the
Chilean peso rose 0.57 percent.
    Brazil's real was up nearly 2 percent, making it one
of the world's top emerging markets gainers.
    The real was also boosted by reports that several parties
were leaning toward supporting center-right presidential
candidate Geraldo Alckmin in the October presidential election.
    If confirmed, that support would give Alckmin additional
time to advertise on television during the presidential
campaign. The vote is poised to be the hardest-to-predict in
decades.
    "Their support does not mean Alckmin will win, nor does it
immediately affect his performance, but it brightens the outlook
for investors and markets," said Alessandro Faganello, a trader
at Advanced brokerage in São Paulo.
    Alckmin is seen by investors as likely to stick to an agenda
of privatizations, deregulation and austerity, which they
consider critical to bringing back Brazil's investment-grade
rating.
    Brazil's benchmark Bovespa stock index rose more
than 1 percent, one of the region's strongest equity markets. 
    Shares of Gol Linhas Aéreas SA were among the
biggest gainers. A stronger local currency could reduce
dollar-denominated costs for the airline.
    Mexico's S&P/BMV IPC benchmark index gained 0.31 percent. 
    Shares of Mexican airline Volaris rose more than
8 percent on Friday after the company reported
better-than-expected results. 
    
    Key Latin American stock indexes and currencies at 1941 GMT:

 Stock indexes                        daily %    YTD %
                             Latest    change   change
 MSCI Emerging Markets       1071.75     1.05    -8.44
                                               
 MSCI LatAm                  2646.33     2.45    -8.66
                                               
 Brazil Bovespa             78446.15     1.24     2.68
                                               
 Mexico IPC                 48897.27     0.31    -0.93
                                               
 Chile IPSA                  5426.29     1.03    -2.49
                                               
 Chile IGPA                 27319.79     0.87    -2.36
                                               
 Argentina MerVal           27492.24     2.53    -8.56
                                               
 Colombia IGBC              12222.10     -0.4     7.49
                                               
 Venezuela IBC              99515.65     -1.4  7778.43
                                               
                                                      
 Currencies                           daily %    YTD %
                                       change   change
                              Latest           
 Brazil real                  3.7710     1.94   -12.14
                                               
 Mexico peso                 19.0535     0.06     3.39
                                               
 Chile peso                   659.55     0.57    -6.81
                                               
 Colombia peso                2867.5     0.50     3.99
 Peru sol                      3.275    -0.03    -1.16
                                               
 Argentina peso              27.5500     0.83   -32.49
 (interbank)                                   
                                               
 Argentina peso                 28.7    -0.17   -33.00
 (parallel)                                    
                                               
    
        

 (Reporting by Bruno Federowski
Additional reporting by Claudia Violante in São Paulo and Daina
Beth Solomon in Mexico City; Editing by Bernadette Baum and
Leslie Adler)
  
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