November 23, 2018 / 2:06 PM / 25 days ago

EMERGING MARKETS-Mexican peso slips, Latam FX set for weekly losses

    By Susan Mathew
    Nov 23 (Reuters) - The Mexican peso and the Brazilian real
weakened against a stronger dollar on Friday with Latin American
currencies on pace to clock weekly losses amid risk aversion due
to uncertainties about global growth and trade.
    The peso dropped 0.2 percent and looked set to end
the week down for the eight straight week. It has so far shed
more than 8 percent over the eight weeks, hammered externally by
broad dollar strength, and locally by perceived policy missteps
by President-elect Andres Manuel Lopez Obrador's team.
    This would be the peso's longest losing streak since June
2016, when Britain's vote to leave the European Union rocked
markets.
    The central bank issued a strong warning last week to the
new government, set to take office on Dec. 1, that any more
market denting policy moves may cause an upward risk to
inflation.
    Over the weekend Lopez Obrador's team plans to conduct a
public consultation - the second of its kind - on a variety of
subjects including a new refinery.
    The peso and stocks tumbled late last month when
Lopez Obrador decided to cancel construction of an airport in
Mexico City after a similar consultation in which citizens voted
to scrap the project, in which billions have already been
invested. 
    This weekend's public consultation in Mexico should have a
limited impact on the peso, analysts at Morgan Stanley said in a
note. However they added, that "investor confidence had already
been impacted going into the airport consultation, and the risk
premium in local assets should continue to increase." 
    The MSCI index of Latin American currencies
was on course to log a weekly loss of more than 1 percent as all
Latin American currencies were set to fall on the week.
    Brazil's real slipped 0.3 percent, and was on track
to log its fourth straight week of losses. 
    Stocks on the benchmark Bovespa index dropped 1.2
percent, dragged down by commodity heavyweights.
    Iron ore miner Vale slid, in line with a drop in
prices of the steel-making ingredient, while oil prices hitting
year lows weighed on state oil firm Petrobras.

    Most emerging market stocks declined on the day as global
growth slowdown fears loomed and trade tensions weighed heading
into the week when U.S. President Donald Trump and his Chinese
counterpart Xi Jinping will meet at the G20 summit.

    
    Key Latin American stock indexes and currencies at 1355 GMT:
 Stock indexes                           daily %     YTD %
                             Latest       change    change
 MSCI Emerging Markets          969.55     -0.66    -15.75
                                                  
 MSCI LatAm                    2562.52     -1.15     -8.33
                                                  
 Brazil Bovespa               86453.33     -1.17     13.16
                                                  
 Mexico IPC                          -         -         -
                                                  
 Chile IPSA                    5101.54     -0.31     -0.31
                                                  
 Argentina MerVal                    -         -         -
                                                  
 Colombia IGBC                       -         -         -
                                                  
                                                          
 Currencies                              daily %     YTD %
                                          change    change
                                Latest            
 Brazil real                    3.8184     -0.35    -13.23
                                                  
 Mexico peso                   20.3720     -0.32     -3.30
                                                  
 Chile peso                      672.8     -0.64     -8.64
                                                  
 Colombia peso                       -         -         -
 Peru sol                            -         -         -
                                                  
 Argentina peso                      -         -         -
 (interbank)                                      
                                                  
 
 (Reporting by Susan Mathew in Bengaluru
Editing by Frances Kerry)
  
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