October 20, 2017 / 2:56 PM / in 2 years

EMERGING MARKETS-Mexico peso leads Latam losses on U.S. tax reform outlook

    By Bruno Federowski
    SAO PAULO, Oct 20 (Reuters) - The Mexican peso tumbled on
Friday after the U.S. Senate cleared the way for a tax reform
that raised the prospect of a fiscal lift to the U.S. economy
that could force interest rates to rise faster.
    Higher U.S. rates could increase the allure of assets from
the world's No. 1 economy, bolstering the value of its currency.
The dollar touched a 3-month high against the Japanese yen
 and a 5-month high against the Swiss franc.
    All currencies in Latin America were in the red. The Mexican
peso, which has seen increased volatility due to the
NAFTA negotiations, led the decline.
    Senate approval of a U.S. budget blueprint on Thursday for
the 2018 fiscal year cleared a critical hurdle for Republicans
to pursue a tax-cut package without Democratic support.

    Investors have also viewed as bullish for the dollar remarks
this week from Federal Reserve Chair Janet Yellen and other Fed
board members that suggested the central bank is moving forward
with another rate hike this year.
    Latin American stocks, however, traded higher as prices of
base metals rebounded from the previous day's slump. Shares of
miner Vale SA, the world's largest iron ore miner,
added the most points to Brazil's benchmark Bovespa stock index
, which rose 0.8 percent on the day.
    Shares in steelmaker Usinas Siderúrgicas de Minas Gerais SA
 jumped, in line with rising steel prices due to
expectations of global supply cuts. Ratings agency Fitch on
Thursday raised the rating of Usiminas, as the firm is known, to
"B" from "CCC", with a stable outlook.
    Key Latin American stock indexes and currencies at 1445 GMT:
 Stock indexes                               daily %     YTD %
                                              change    change
 MSCI Emerging Markets              1120.75     0.34     29.53
 MSCI LatAm                         2946.65     0.01     25.87
 Brazil Bovespa                    76861.76     0.76     27.62
 Mexico S&P/BVM IPC                50449.39      0.9     10.53
 Chile IPSA                         5507.70     0.56     32.67
 Chile IGPA                        27600.12      0.5     33.11
 Argentina MerVal                  27127.04      1.2     60.35
 Colombia IGBC                     10941.45     0.01      8.03
 Venezuela IBC                       572.69     0.23    -98.19
 Currencies                                  daily %     YTD %
                                              change    change
 Brazil real                         3.1904    -0.49      1.84
 Mexico peso                        19.0140    -1.10      9.10
 Chile peso                           628.8    -0.59      6.66
 Colombia peso                      2935.22    -0.59      2.26
 Peru sol                             3.238    -0.12      5.44
 Argentina peso (interbank)         17.4650    -0.03     -9.10
 Argentina peso (parallel)            17.93     0.67     -6.19
 (Reporting by Bruno Federowski)
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