February 1, 2018 / 3:53 PM / in 6 months

EMERGING MARKETS-LatAm currencies up; rally undeterred by hawkish Fed

    By Bruno Federowski
    SAO PAULO, Feb 1 (Reuters) - Latin American currencies
turned higher on Thursday as hawkish remarks from the Federal
Reserve failed to derail a monthlong rally fueled by investors'
appetite for risk.
    In its policy statement on Wednesday, the Fed left interest
rates unchanged on Wednesday but bolstered expectations that
they will continue to rise by saying inflation was likely to
accelerate this year.
    Those comments initially led to losses in emerging market
currencies, which offer higher yields, but the sell-off proved
short-lived.
    Instead, traders focused on Friday's key U.S. payrolls
report, which is likely to offer additional hints on whether
stubbornly slow inflation is accelerating toward the central
bank's target.
    Currencies from Brazil, Mexico, Chile
 and Colombia firmed between 0.4 percent and 0.9
percent, extending a rally underpinned by expectations of
accelerating global growth.
    Stock indexes also rose throughout the region, although
gains were somewhat muted.
    Brazil's benchmark Bovespa stock index rose 0.4
percent as a decline in shares of lender Banco Bradesco SA
 kept a lid on gains.
    Bradesco forecast fast loan book growth this year but more
pressure on margins, disappointing investors. Goldman Sachs
analysts called the company's predictions "conservative."

    
    Key Latin American stock indexes and currencies at 1720 GMT:
 Stock indexes                                daily %   YTD %
                                               change  change
                                   Latest              
 MSCI Emerging Markets               1248.93    -0.45     8.3
 MSCI LatAm                          3216.51     0.58   13.08
 Brazil Bovespa                     85262.01     0.41   11.60
 Mexico IPC                         50688.65     0.46    2.70
 Chile IPSA                          5872.06     0.28    5.53
 Chile IGPA                         29500.99     0.28    5.43
 Argentina MerVal                   35132.59     0.56   16.85
 Colombia IGBC                      12179.48     0.55    7.11
                                                             
 Currencies                                   daily %   YTD %
                                               change  change
                                      Latest           
 Brazil real                          3.1670     0.39    4.62
 Mexico peso                         18.5090     0.52    6.43
 Chile peso                           598.73     0.57    2.66
 Colombia peso                       2804.95     0.87    6.31
 Peru sol                              3.212     0.09    0.78
 Argentina peso (interbank)          19.4800     0.87   -4.52
                                                       
 Argentina peso (parallel)             19.87     0.40   -3.22
                                                       
 
 (Reporting by Bruno Federowski; Editing by Lisa Von Ahn)
  
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