March 7, 2019 / 3:34 PM / 4 months ago

EMERGING MARKETS-Latam currencies hurt by strong dollar, stocks weaken

    By Aaron Saldanha
    March 7 (Reuters) - Latin American currencies fell on
Thursday as the dollar rose while Latin American stocks dropped,
following weakness on Wall Street.
    The dollar hit a near three-week peak against a basket of
currencies after the European Central Bank postponed the
timing of its first post-crisis rate hike to 2020 at the
earliest and offered banks a new round of cheap loans to revive
the euro zone economy. 

    MSCI's index of Latin American currencies
was 1.5 percent lower, on track for its worst day in nearly
three months.
    Brazil's real dropped 0.9 percent to levels last seen
in early 2019. The currency had been heavily bought since then
on optimism about reform to the country's pension system.
    Many investors believe revising the pension system of Latin
America's largest economy is crucial, with UBS predicting the
current system would represent 79 percent of the budget by 2026
if it is left unchanged.    
    Sao Paulo-traded stocks fell 0.4 percent, weighed 
by losses among industrials and energy stocks.
    Brazilian state-run oil firm Petroleo Brasileiro SA's common
shares and preferred shares fell 0.8
percent and 0.5 percent, respectively, as oil prices
gave up earlier gains.  
    Highway operator CCR SA tumbled 5.9 percent to
lead the index's losers, after its concessionaire agreed to a
750 million reais ($194.9 million) leniency deal related to
alleged bribes.   
    Mexico's peso slid 0.4 percent after data showed
consumer price inflation in February slowed from January. The
data could partially dilute the justification for any
hawkishness by the central bank at a policy meeting later this
month.
    Mexican stocks fell 0.9 percent on losses among
financials and industrials.
    Chile's peso slipped 0.3 percent as the price of
copper, a key Chile export, slipped. Local stocks
 fell 0.2 percent due to losses among industrials.
 
    Colombia's peso softened 0.2 percent, while
Argentina's peso slid 1.5 percent as private investors
bought dollars.
                    
    Key Latin American stock indexes and currencies at 1506 GMT
    
 Stock indexes                                    daily %
                                      Latest       change
 MSCI Emerging Markets                  1044.62     -1.05
 MSCI LatAm                             2711.63      -1.6
 Brazil Bovespa                        93829.19     -0.41
 Mexico IPC                            41543.72     -0.87
 Chile IPSA                             5245.49      -0.2
                                                 
 Argentina MerVal                      32319.80     -0.06
 Colombia IGBC                         12433.43     -0.27
                                                         
 Currencies                                       daily %
                                                   change
                                         Latest  
 Brazil real                             3.8652     -0.78
 Mexico peso                            19.4430     -0.43
 Chile peso                               663.5     -0.60
 Colombia peso                          3112.01     -0.24
 Peru sol                                 3.309     -0.06
 Argentina peso (interbank)             41.3000     -1.33
                                                 
 

($1 = 3.8487 reais)

 (Reporting by Aaron Saldanha in Bengaluru
Editing by Susan Thomas)
  
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