July 10, 2018 / 11:34 PM / 3 months ago

EMERGING MARKETS-LatAm currencies rise; Mexico peso climbs to two-month high

 (Adds details on peso, updates prices; changes dateline,
previous SAO PAULO)
    MEXICO CITY, July 10 (Reuters) - Mexico's peso hit its
highest level in more than two months on Tuesday, advancing with
other Latin American currencies, including the Brazilian real,
as traders took heart from signals that U.S.-China trade
tensions have yet to affect global growth.
    The peso strengthened by over 1.5 percent to end trading at
18.93 per dollar, the first time it had closed below the
19-per-dollar mark since the start of May. Brazil's real also
firmed, finishing the session up 1.84 percent.
    "The (Mexican) peso appreciation stems from rising demand
for pesos due to the expectation that the national currency will
continue to strengthen in coming months, especially if the NAFTA
renegotiation restarts in a cooperative atmosphere," said Banco
BASE analyst Gabriela Siller in a note to clients.
    Regional currencies were also aided by the lack of
developments regarding a possible U.S.-China trade war, she
added.
    On Tuesday afternoon, Mexico's President-elect Andres Manuel
Lopez Obrador thanked U.S. President Donald Trump for showing a
"respectful attitude" toward his team and held out hope for
progress on shared migration challenges.
    Lopez Obrador, his top aides and members of the current
Mexican government are due to hold talks with several top Trump
administration officials in Mexico City on Friday.
    Banco BASE's Siller said if the talks pointed to future
cooperation on issues like the NAFTA talks, the peso could get
another boost.
    "The analysts believe the medium-term target is closer to
18.50 than 19.50," a Mexico City trader said about the peso.
    The United States and China late last week slapped duties on
$34 billion worth of each other's imports, and Beijing on
Tuesday said it would raise tariff rates for some U.S. optical
fiber products.
    But in Latin America, as in the United States to a
significant extent, traders have shrugged off the dispute and
have in fact been heartened by a relative lack of measurable
impacts stemming from the tit-for-tat trade dispute.
    That attitude helped drive up Brazil's real currency, even
in the face of domestic political uncertainty.
    Argentina's peso also rose, gaining more than 2
percent to hit its highest level in two weeks.
    
Key Latin American stock indexes and currencies at 2200 GMT:
    
 Stock indexes                  Latest      Daily    YTD pct
                                             pct      change
                                            change   
 MSCI Emerging Markets           1,076.19      0.04      -7.1
                                                     
 MSCI LatAm                      2,557.32      0.19     -9.58
 Brazil Bovespa                 74,862.38      -0.2     -2.02
 Mexico IPC                     48,990.92      -0.5     -0.74
 Chile IPSA                      5,323.29     -0.04     -4.34
 Chile IGPA                     26,946.70     -0.07     -3.70
 Argentina MerVal               27,635.21      0.09     -8.08
 Colombia IGBC                  12,403.97       0.4      9.09
 Venezuela IBC                 104,648.15    -12.54  8,184.76
                                                             
 Currencies                     Latest      Daily    YTD pct
                                             pct      change
                                            change   
 Brazil real                       3.7975      1.84    -12.75
 Mexico peso                      18.9310     1.527      4.06
 Chile peso                        646.80      0.77     -4.97
 Colombia peso                   2,871.90      0.45      3.83
 Peru sol                           3.273      0.12     -1.10
 Argentina peso (interbank)         27.33      2.12    -31.94
                                                     
 Argentina peso (parallel)          28.45      1.40    -32.41
                                                     
 

 (Reporting by Gram Slattery; additional reporting by Camila
Moreira in Sao Paulo and Miguel Angel Gutiérrez in Mexico City;
editing by Jonathan Oatis)
  
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