November 1, 2017 / 2:18 PM / a month ago

EMERGING MARKETS-LatAm currencies nearly flat ahead of Fed rate decision

    By Bruno Federowski
    SAO PAULO, Nov 1 (Reuters) - Latin American currencies were
nearly flat on Wednesday as investors held off bets ahead of a
Federal Reserve interest rate decision.
    Traders widely expect the U.S. central bank to keep rates
unchanged, with a hike coming in December. Nevertheless, the
policy statement could provide valuable hints over the future
path of monetary policy following mixed economic data.
    Traders are also waiting for the nomination of the next Fed
chair, who will replace Janet Yellen after her term ends in
February 2018.
    President Donald Trump, who has interviewed Yellen, Fed
Governor Jerome Powell and three others for the job, is likely
to announce the nomination on Thursday. Powell, a soft-spoken
centrist who has supported Yellen's gradual approach to raising
rates, is seen as having a lock on the position.
    A slower path of rate hikes could support demand for
emerging market currencies, which offer higher yields.
    The Brazilian real and the Mexican peso
treaded water. Both currencies posted their worst monthly losses
in around a year in October.
    Brazil's benchmark Bovespa stock index rose 0.8
percent. Shares of miner Vale SA added the most
points to the index, tracking higher iron ore prices after
losing over 5 percent in the prior five trading days.
    Shares in retailer Magazine Luiza SA, which are
not part of the benchmark index, rose 7.6 percent after posting
stronger-than-expected third-quarter earnings.
    In a client note, analysts at Banco BTG Pactual SA called
Magazine Luiza an excellent vehicle for investors seeking
exposure to the secular growth of Brazilian e-commerce in the
next 5 years.
    
    Key Latin American stock indexes and currencies at 1400 GMT:
 Stock indexes                               daily %    YTD %
                                    Latest    change   change
 MSCI Emerging Markets              1131.85     1.14    29.78
                                                      
 MSCI LatAm                         2826.85     0.62    20.02
 Brazil Bovespa                    74933.02     0.84    24.42
 Mexico S&P/BVM IPC                48823.66     0.41     6.97
                                                      
 Chile IPSA                         5588.08    -0.37    34.61
 Chile IGPA                        28028.35    -0.25    35.18
 Argentina MerVal                  27935.28        0    65.12
 Colombia IGBC                     10693.50     0.58     5.58
 Venezuela IBC                       681.34        0   -97.85
                                                             
 Currencies                                  daily %    YTD %
                                              change   change
                                     Latest           
 Brazil real                         3.2720    -0.01    -0.70
                                                      
 Mexico peso                        19.1530    -0.07     8.31
                                                      
 Colombia peso                      3036.64     0.14    -1.16
 Peru sol                              3.25     0.00     5.05
                                                      
 Argentina peso (interbank)         17.6600     0.03   -10.11
                                                      
 Argentina peso (parallel)            18.05     0.55    -6.81
                                                      
 
 (Reporting by Bruno Federowski; editing by Susan Thomas)
  

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