June 4, 2019 / 2:23 PM / 3 months ago

EMERGING MARKETS-Mexican peso bounces up on hopes of deal on U.S. migration

    By Susan Mathew
    June 4 (Reuters) - Mexico's peso bounced up after a big
two-day slide, as Mexico reported progress on talks with
Washington to avoid tariffs, while other regional currencies
firmed after a speech by Federal Reserve Chair Jerome Powell
made some investors believe a rate cut could be on the way.
    Mexico's peso rebounded as much as 1%. Mexican
President Andres Manuel Lopez Obrador said he expects to reach a
deal with the United States over immigration before June 10 -
when punitive tariffs on Mexican exports to the Unites States
are set to take effect at an initial 5%.
    The peso was coming off its biggest two-day decline since
last October, when the currency had tumbled after construction
was canceled on a partially built $13 billion new airport in
Mexico City.  
    Brazil's real rose 0.5%, touching a seven week high,
while the Chilean peso climbed 0.8% ahead of Powell's
speech. The Colombian peso jumped almost 2% to an over
two-week high. 
    In his opening remarks at a monetary policy conference on
Tuesday, Powell said the Fed was "closely monitoring the
implications" of a trade dispute and will respond "as
appropriate" to the risks posed by a global trade war and other
recent developments.
    On Monday, St. Louis Fed president James Bullard said a U.S.
interest rate cut "may be warranted soon" given the rising risk
to economic growth posed by global trade tensions as well as
weak U.S. inflation.
   Among stocks, Brazil stocks rose up to 0.4%, staying
near two month highs. Largely broad based gains were capped by a
17% slump in petrochemical producer Braskem, after
petrochemical giant LyondellBasell Industries said it
ended talks to acquire the company. 
    Chile shares rose 0.4% and looked set to extend
gains to a fifth straight session, with Wall Street also opening
higher on Fed rate cute hopes. 

    Key Latin American stock indexes and currencies at 1411 GMT:
    Stock indexes             Latest    Daily %
                                         change
 MSCI Emerging Markets         1004.44     -0.39
                                        
 MSCI LatAm                    2726.79      1.26
                                        
 Brazil Bovespa               97398.65      0.39
                                        
 Mexico IPC                   43077.44     -0.07
                                        
 Chile IPSA                    5032.77      0.38
                                        
 Argentina MerVal                    -         -
                                        
 Colombia IGBC                12087.60      0.27
                                        
                                                
       Currencies             Latest    Daily %
                                         change
 Brazil real                    3.8668      0.56
                                        
 Mexico peso                   19.6110      0.81
                                        
 Chile peso                      698.2      0.49
                                        
 Colombia peso                  3310.7      1.86
 Peru sol                        3.348      0.36
                                        
 Argentina peso                      -         -
 (interbank)                            
                                        
 
 (Reporting by Susan Mathew in Bengaluru; Editing by David
Gregorio)
  
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