January 31, 2018 / 5:01 PM / 10 months ago

EMERGING MARKETS-LatAm currencies up after Trump's speech; Fed eyed

    By Bruno Federowski
    SAO PAULO, Jan 31 (Reuters) - Latin American currencies
strengthened on Wednesday, tracking global U.S. dollar weakness
after U.S. President Donald Trump sent a mixed message on
bipartisan compromise in his first State of the Union address.
    Trump called on the U.S. Congress to pass legislation to
ensure at least $1.5 trillion in new infrastructure spending,
and urged lawmakers to put aside partisan interests but pushed a
hard line on immigration.
    "The lack of specifics (and a more combative tone) has
allowed US equity markets and U.S. Treasury bonds to steady and
improve after slipping since the start of the week but the U.S.
dollar remains on the defensive overall," Scotiabank analysts
wrote in a client note.
    The new round of weakness came after a period of
consolidation earlier this week as markets expected the U.S.
Federal Reserve to take a more confident stance about the
outlook of the economy but keep policy unchanged.
    The Fed will publish a policy statement later Wednesday
following a two-day meeting.
    Currencies from Brazil, Colombia, Mexico
 and Chile firmed between 0.2 percent and 1
percent as the U.S. dollar headed for its biggest monthly drop
in nearly two years against a basket of developed market
    Stock markets were mixed with Brazil's benchmark Bovespa
index the biggest gainer in the region due to a rally in
bank shares.
    Banco Santander Brasil SA rose sharply after it
beat fourth-quarter earnings estimates and quickly expanded its
loan book into higher-margin segments.
    Shares in other lenders, such as Banco Bradesco SA
 and Itaú Unibanco Holding SA, followed
    Key Latin American stock indexes and currencies at 1630 GMT:
 Stock indexes                            daily %    YTD %
                                           change   change
 MSCI Emerging Markets           1254.33     0.54      7.7
 MSCI LatAm                      3202.28     0.95    12.16
 Brazil Bovespa                 85414.09      1.1    11.80
 Mexico IPC                     50204.41    -0.35     1.72
 Chile IPSA                      5857.25    -0.04     5.26
 Chile IGPA                     29421.71        0     5.15
 Argentina MerVal               34857.03      1.8    15.94
 Colombia IGBC                  12210.34    -0.45     7.38
 Currencies                               daily %    YTD %
                                           change   change
 Brazil real                      3.1730     0.18     4.42
 Mexico peso                     18.5930     0.98     5.95
 Chile peso                       601.12     0.92     2.25
 Colombia peso                   2831.32     0.71     5.32
 Peru sol                          3.215     0.03     0.68
 Argentina peso (interbank)      19.6250     0.05    -5.22
 Argentina peso (parallel)         19.91     0.65    -3.42
 (Reporting by Bruno Federowski; Editing by Jeffrey Benkoe)
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