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EMERGING MARKETS-LatAm currencies strengthen as U.S. wage growth slows
September 1, 2017 / 9:59 PM / in 3 months

EMERGING MARKETS-LatAm currencies strengthen as U.S. wage growth slows

 (Updates prices)
    By Bruno Federowski
    SAO PAULO, Sept 1 (Reuters) - Latin American currencies
strengthened on Friday after U.S. wage growth eased, fueling
bets that the Federal Reserve will not raise interest rates
again this year.
    U.S. average hourly earnings rose a wafer-thin 0.1 percent
in August after two months of stronger gains, data showed on
Friday, adding to concerns over sluggish inflation that remains
far below the Fed's 2 percent target.
    A slower path of U.S. rate hikes may sustain demand for
high-yielding assets in emerging markets, bolstering the value
of their currencies.
    "Real economic activity is solid but price and wage
pressures remain weak," Citigroup strategists wrote in a client
note. "Markets, and the Fed, will remain in 'wait and see'
    Currencies from Mexico and Colombia firmed
around 0.5 percent, and the Argentina peso      
climbed 0.7 percent. The Brazil real inched up about .1
    Gains in the Chilean peso were limited by bets on
interest rate cuts later in the year, after minutes from the
central bank's last policy meeting showed one policymaker voted
for a reduction, and the currency was essentially flat.

    The peso has rallied in recent weeks as copper prices
soared, feeding expectations of easing inflationary pressure.
    Brazil's benchmark Bovespa stock index rose nearly
1.7 percent, also helped by stronger-than-expected economic
growth in the second quarter that suggested a recovery from the
deepest recession in a century remained on track.
    Key Latin American stock indexes and currencies at 1938 GMT:
 Stock indexes                                 daily %      YTD %
                                Latest          change     change
 MSCI Emerging Markets              1091.42       0.34      26.14
 MSCI LatAm                         2902.95       1.04      22.75
 Brazil Bovespa                    72007.79       1.66      19.56
 Mexico IPC                        51049.51      -0.31      11.85
 Chile IPSA                         5173.91        0.4      24.63
 Chile IGPA                        25838.50       0.43      24.62
 Argentina MerVal                  23703.80       0.49      40.11
 Colombia IGBC                     11162.63       1.03      10.21
 Venezuela IBC                    234286.09      -0.48     638.95
 Currencies                                    daily %      YTD %
                                                change     change
 Brazil real                         3.1441       0.09       3.34
 Mexico peso                        17.8020       0.47      16.53
 Chile peso                          625.05      -0.07       7.30
 Colombia peso                         2930       0.58       2.44
 Peru sol                             3.238       0.03       5.44
 Argentina peso (interbank)         17.2000       0.70      -7.70
 Argentina peso (parallel)             18.1       0.88      -7.07
 (Reporting by Bruno Federowski; Editing by Alistair Bell and
Tom Brown)

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