January 11, 2018 / 3:23 PM / a year ago

EMERGING MARKETS-Mexican peso continues slide on NAFTA worries

    SAO PAULO, Jan 11 (Reuters) - The Mexican peso fell on
Thursday by the most in nearly three weeks, extending a slide
after reports the United States could pull out of the North
American Free Trade Agreement (NAFTA).
    Reuters reported late on Wednesday that Canadian officials
are increasingly convinced U.S. President Donald Trump will
leave the accord - a severe setback for Mexico's economy, which
depends on exports to the United States.
    One possible U.S. tactic would be the presentation of a
formal withdrawal letter as a means of creating leverage, given
that it would likely take six months for the exit to take
effect.
    However, Mexican officials told Reuters early on Thursday
that if Trump triggered the withdrawal process then Mexico would
break off NAFTA negotiations, which are scheduled to resume in
January.
    The peso fell 0.63 percent in morning trading to
19.41 pesos to the dollar.
    Among major equities markets, Brazil's Bovespa index
led gains in midday trading, thanks in part to solid inflows of
foreign capital from investors looking to buy into a nascent
consumer recovery in Latin America's largest economy.
    "With signs of good international liquidity remaining,
Brazil can still be attractive to new resources from foreign
investors," brokerage Magliano wrote in a note. 
    The index had gained 0.35 percent by midday.
    Among the biggest winners on the Bovespa was private
education company Estácio Participações SA, which
rose 2.55 percent to 37.72 reais after analysts reiterated an
outperform rating and raised the target price to 43 reais.
    Estácio rival Kroton Educacional SA was the
biggest loser on the index, slipping 2.49 percent to 17.99
reais.
    
Key Latin American stock indexes and currencies at 1427 GMT:

 Stock indexes                             daily %     YTD %
                               Latest       change    change
 MSCI Emerging Markets           1196,10     -0,12      3,37
                                                    
 MSCI LatAm                      2932,05      0,23      3,43
                                                    
 Brazil Bovespa                 78472,79      0,35      2,71
                                                    
 Mexico IPC                         0,00         0   -100,00
                                                    
 Chile IPSA                      5691,15      0,23      2,27
                                                    
 Chile IGPA                     28631,47      0,21      2,33
                                                    
 Argentina MerVal               31640,72      0,03      5,24
                                                    
 Colombia IGBC                  11809,77         0      3,86
                                                    
 Venezuela IBC                   1342,67      1,15      6,30
                                                    
                                                            
 Currencies                                daily %     YTD %
                                            change    change
                                  Latest            
 Brazil real                      3,2316     -0,13      2,53
                                                    
 Mexico peso                     19,4050     -0,63      1,52
                                                    
 Chile peso                        608,5     -0,02      1,01
                                                    
 Colombia peso                   2870,27      0,55      3,89
 Peru sol                          3,219      0,09      0,56
                                                    
 Argentina peso (interbank)      18,6500     -0,11     -0,27
                                                    
 Argentina peso (parallel)         19,28      0,21     -0,26
                                                    
 
 (Reporting by Gram Slattery; Editing by Andrew Hay)
  
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