October 24, 2019 / 2:50 PM / 20 days ago

EMERGING MARKETS-Latam FX index up to 11-week peak as currencies hit multi-month highs

    By Susan Mathew
    Oct 24 (Reuters) - Mexico's peso scaled nearly a three-month
high against a stronger dollar on Thursday, while Brazil's real
touched its highest in more than two months, taking an index of
Latin American currencies up 1%.
    Most other currencies in the region also gained, with
Colombia's peso hitting a five-week high, while Chile's
currency jumped as much as 0.9%. MSCI's index of Latam
currencies jumped to an 11-week high. 
    The dollar, which had lost momentum after weak durable goods
data out of the United States, strengthened after the euro
 and pound slipped.
    A third day of gains for Brazil's real came after the
Senate gave its final seal of approval for a landmark pension
reform on Wednesday. The bill now awaits presidential
ratification, which is expected by Nov. 19.
    That follows months of political wrangling that whipsawed
the currency. The reform aims to generate targeted savings of
800 trillion reais over the next decade and help stabilize the
country's public finances and boost growth.
    The central bank on Thursday said Brazil's current account
deficit as a share of gross domestic product widened to 2.05% in
the 12 months to September.
    In Mexico, data showed the economy continued to grow at a
sluggish pace, with an improvement in secondary activities,
which include manufacturing. Separately, consumer price data
showed that annual inflation in the first half of October came
in slightly below the consensus forecast.
    The peso rose 0.2%. 
    Chile's currency climbed after the central bank
delivered a third major rate cut since June amid raging protests
over economic inequality. The bank cut the benchmark interest
rate by a quarter of a percentage point to 1.75% after the
market close on Wednesday, and said the unrest will have an
impact on the economy.
    Analysts at Credit Suisse say the recent commitment by
certain unions in the mining sector to partake in strikes will
likely dent growth further. They expect the bank to cut again in
December by 25 basis points. 
    Among stocks, Brazil's shares fell 0.2% to break a
three-day winning streak, while Colombian equities lost
half a percent.
    Highway operator CCR SA was the top performer on
Brazil's Bovespa index after a Citigroup target price hike,
while steelmaker Companhia Siderurgica Nacional slid
to the bottom after reporting a quarterly net loss and cutting
its 2019 profit guidance.
    Mexican shares traded steady. A gain in the country's
largest retailer, Walmart de Mexico, on the back of
a quarterly profit beat was offset by a slump in cement maker
Cemex, which reported a fall in net sales.
      
    
   Key Latin American stock indexes and currencies at 1425 GMT:
   Stock indexes            Latest    Daily %
                                      change
 MSCI Emerging Markets       1036.03     0.49
                                      
 MSCI LatAm                  2799.86     0.92
                                      
 Brazil Bovespa            107350.78    -0.18
                                      
 Mexico IPC                 43547.36        0
                                      
 Chile IPSA                  4943.32     0.67
                                      
 Argentina MerVal           32566.31   -0.637
                                      
 Colombia IGBC              13070.76    -0.45
                                      
                                             
       Currencies           Latest    Daily %
                                      change
 Brazil real                  4.0126     0.49
                                      
 Mexico peso                 19.0739     0.18
                                      
 Chile peso                   724.65     0.16
                                      
 Colombia peso               3380.92     0.31
 Peru sol                     3.3458    -0.02
                                      
 Argentina peso              59.3000    -0.51
 (interbank)                          
                                      
 
 (Reporting by Susan Mathew in Bengaluru
Editing by Paul Simao)
  
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