September 19, 2018 / 4:18 PM / 2 months ago

EMERGING MARKETS-LatAm currencies up after latest U.S.-China trade tariffs

    By Bruno Federowski
    BRASILIA, Sept 19 (Reuters) - Latin American currencies on
Wednesday firmed as investors saw the latest round of U.S-China
trade tariffs as less aggressive than expected, boosting
appetite for risky assets.
    The Mexican peso strengthened 0.3 percent.
    The tariffs "did not have the expected impact, and the
market is now focused on the ongoing negotiations" between
Canada and the United States, said Alfonso Esparza, an analyst
at OANDA.
    Longer-than-expected negotiations to revamp the North
American Free Trade Agreement (NAFTA) have weighed on the peso
in recent months, but the currency has since recovered after the
United States and Mexico reached a deal. Disagreement between
Canadian and U.S. negotiators mean talks once again hit a wall. 
    U.S. Chamber of Commerce President Tom Donohue said on
Wednesday that the Trump administration could still avoid a
full-blown global trade war that erodes business confidence if
it seals a trilateral NAFTA trade deal and makes progress on
European trade issues in the coming weeks.
    The Brazilian real rose 0.5 percent after initially
weakening at the open. The currency has been battered recently
by concerns over the presidential elections.
    A voter intention survey for next month's vote showed
leftist Fernando Haddad gaining strength, raising concern among
traders who see him as less likely to cut government spending
and pursue structural reforms than far-right lawmaker Jair
Bolsonaro, who has led polls.
    Bolsonaro and Haddad are in a technical tie in a likely
second-round runoff vote.
    

    Key Latin American stock indexes and currencies at 1720 GMT:
 Stock indexes                            daily %    YTD %
                                           change   change
                               Latest              
 MSCI Emerging Markets           1019.74     0.33   -11.97
                                                   
 MSCI LatAm                      2500.71     1.51   -11.58
                                                   
 Brazil Bovespa                 78647.26     0.43     2.94
 Mexico IPC                     49747.53     0.17     0.80
 Chile IPSA                      5354.45    -0.16    -0.16
                                                   
 Argentina MerVal               32771.40     2.07     9.00
                                                   
 Colombia IGBC                  12328.53    -0.25     8.42
                                                   
                                                          
 Currencies                               daily %    YTD %
                                           change   change
                                  Latest           
 Brazil real                      4.1187     0.54   -19.55
                                                   
 Mexico peso                     18.7600     0.25     5.01
                                                   
 Peru sol                          3.301     0.15    -1.94
                                                   
 Argentina peso (interbank)      39.3700     1.09   -52.76
                                                   
 Argentina peso (parallel)         38.75     2.58   -50.37
                                                   
 
 (Reporting by Bruno Federowski; Additional reporting by Miguel
Gutierrez in Mexico City; editing by Jonathan Oatis)
  
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