January 8, 2020 / 7:53 PM / 2 months ago

EMERGING MARKETS-Latam currencies cheer Trump's de-escalating tone on Iran

 (Updates prices)
    By Susan Mathew
    Jan 8 (Reuters) - Latin American currencies firmed on
Wednesday, with Mexico's peso hitting its highest in almost nine
months, after U.S. President Donald Trump allayed fears of an
escalation in tensions between Washington and Tehran.
    Speaking from the White House, Trump said no Americans were
harmed in Iranian missile attacks on military bases housing U.S.
troops in Iraq overnight and suggested Washington might not
carry out immediate retaliation.
    Markets worldwide had seen increased volatility over the
last few sessions after the killing of a top Iranian general by
the United States on Friday had stoked fears of harsh
retaliation from Iran.
    "Risk assets extended their gains after it was clear
(Trump's) speech was de-escalating the U.S.-Iran conflict," said
Edward Moya, senior market analyst, OANDA New York.
    Major Latam currencies gained between 0.2% and 1.5% despite
a strong dollar, with Chile's peso in the lead in its
second day of gains, attempting to make up for severe losses
earlier this week. 
    Chilean consumer prices rose 0.1% in December, the
government's statistics agency said on Wednesday, while annual
inflation hit the central bank's 3% target.
    Brazil's real rose to 4.0489 per dollar and Mexico's
peso rose 0.6%, while oil exporter Colombia's currency
braved sliding oil prices to rise 0.4%.
    But regional stocks suffered casualties from the decline in
oil prices. Brazil's state oil firm Petroleo Brasileiro
 was the biggest drag on Sao Paulo's
bovespa index, while Colombia's Ecopetrol
weighed on the COLCAP index.
    The Colombian index logged its biggest one-day drop in more
than a month. 
    Iron ore miner Vale was also among the drags on
Brazil's Bovespa as it gave up session gains. A Brazilian state
prosecutor expects to bring criminal charges "in the next few
days" against Vale over a mining waste dam collapse that killed
at least 259 people, Reuters reported on Wednesday.
    
    Chilean stocks traded flat after gaining for five
sessions straight when they added 5.2%. 
    Mexican shares bucked the trend, up 0.8%. Cement
maker Cemex SAB de CV rose 1.8% after British
construction materials firm Breedon Group Plc said it
would buy certain UK assets from Cemex for 178 million pounds
($233.79 million).
    Mexican President Andres Manuel Lopez Obrador said he
expects foreign investment to increase as the U.S. Senate is set
to approve the U.S.-Mexico-Canada Agreement (USMCA) trade deal.

    Key Latin American stock indexes and currencies at 1930 GMT:
    Stock indexes             Latest    Daily %
                                         change
 MSCI Emerging Markets         1114.21     -0.15
                                        
 MSCI LatAm                    2936.56      0.65
                                        
 Brazil Bovespa              116220.19     -0.38
                                        
 Mexico IPC                   44502.29      0.78
                                        
 Chile IPSA                    4909.03     -0.09
                                        
 Argentina MerVal             41069.46    -0.112
                                        
 Colombia COLCAP               1650.19     -0.82
                                        
                                                
       Currencies             Latest    Daily %
                                         change
 Brazil real                    4.0489      0.37
                                        
 Mexico peso                   18.7924      0.56
                                        
 Chile peso                     757.75      1.46
                                        
 Colombia peso                    3242      0.59
 Peru sol                        3.314      0.21
                                        
 Argentina peso                59.8150     -0.31
 (interbank)                            
 
    

 (Reporting by Susan Mathew in Bengaluru; editing by Nick
Macfie)
  
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