April 19, 2018 / 8:39 PM / 4 months ago

EMERGING MARKETS-Mexico peso drops 2 pct on technical correction, political jitters

    SAO PAULO/MEXICO CITY, April 19 (Reuters) - Latin American
currencies fell against the dollar on Thursday, with the Mexican
peso posting the strongest fall, as traders took advantage of an
opportunity to make a technical correction amid continued
political uncertainty.
    Both the peso and Brazilian real had posted strong gains
against the greenback on Tuesday and Wednesday. Equities also
rose across the region on those days as traders bought back into
risky asset that they had previously exited.

    The peso fell 2.01 percent against the dollar just
days after reaching its strongest level since September as
investors banked on improved odds of a new North American Free
Trade Agreement being signed.
    Traders in Mexico continue to be spooked by the strong
performance in opinion polls by leftist Andres Manuel Lopez
Obrador. A late Wednesday poll by polling firm Mitofsky showed
him pulling further ahead of his rivals in the run-up to the
July 1 presidential election.
    "The election and the recent opinion polls have started to
worry the market," said Gabriela Siller, head of economic
analysis at Banco BASE.
    In Brazil, markets continued to be unsettled by an extremely
uncertain political outlook during an election year, with the
tactics of the country's left still up in the air following the
imprisonment of Luiz Inacio Lula da Silva, the presidential
front-runner who was jailed earlier in April for corruption.

    "We see a technical correction after (Wednesday's
movement)," said Ricardo Gomes da Silva, director of brokerage
Correparti Corretora.
    The real fell 0.27 percent. All other major
currencies in the region were also down.
    Across the region, equities markets were mixed.
    Brazil's benchmark Bovespa index, which had risen in
morning trade, was virtually flat. Mexico's benchmark IPC stock
index dipped 0.67 percent.
    Key Latin American stock indexes and currencies at 1945 GMT:
   
    
 Stock indexes                               daily %    YTD %
                                 Latest       change   change
 MSCI Emerging Markets             1182.62      0.55     1.53
                                                      
 MSCI LatAm                        3063.75     -0.94     9.35
                                                      
 Brazil Bovespa                   85799.57      0.03    12.30
 Mexico IPC                       48762.63     -0.67    -1.20
 Chile IPSA                        5697.48      0.12     2.39
                                                      
 Chile IGPA                       28464.94       0.2     1.73
 Argentina MerVal                 31233.87     -0.95     3.89
                                                      
 Colombia IGBC                    12418.06       0.7     9.21
                                                      
 Venezuela IBC                    24109.35      6.91   -23.96
                                                             
 Currencies                                  daily %    YTD %
                                              change   change
                                    Latest            
 Brazil real                        3.3886     -0.27    -2.22
                                                      
 Mexico peso                       18.4510     -2.01     6.76
                                                      
 Chile peso                          595.3     -0.24     3.25
                                                      
 Colombia peso                      2730.5     -0.72     9.21
 Peru sol                            3.219     -0.06     0.56
                                                      
 Argentina peso (interbank)        20.1600     -0.12    -7.74
                                                      
 Argentina peso (parallel)            20.5      0.63    -6.20
                                                      
                                                             
 
 (Reporting by Gram Slattery and Claudia Volante in Sao Paulo
and Miguel Gutierrez in Mexico City
Writing by Anthony Esposito
Editing by Jonathan Oatis and Alistair Bell)
  
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