May 14, 2018 / 10:10 PM / 6 months ago

EMERGING MARKETS-Mexico peso weakens on NAFTA, Argentine peso hits new low

    By Miguel Gutierrez
    MEXICO CITY, May 14 (Reuters) - Mexico's peso weakened on
Monday on uncertainty over an update of the North American Free
Trade Agreement (NAFTA) after U.S., Canada and Mexico's
representatives showed no sign of reaching a deal, while
Argentina's peso hit an all-time low.
    Mexico's peso was at 19.6260 per U.S. dollar on Monday
afternoon, almost 1 percent weaker than the day earlier
reference price. The IPC stock index fell 0.45 percent.
    Investors are concerned that NAFTA negotiators may fail to
reach a new deal before a deadline this week that would give the
current U.S. Congress a chance of passing it.
     The Argentine peso fell more than 6 percent
after the International Monetary Fund (IMF) said a target
exchange rate will not be a condition of a financing deal with
Argentina. 
    Argentina requested a "high access stand-by arrangement"
from the IMF last week after the peso depreciated rapidly,
prompting the central bank to sell reserves and hike interest
rates to 40 percent in a bid to contain one of the world's
highest inflation rates as well as stop the peso slide.
    The Brazilian real also weakened on Monday after a
presidential poll showed strong support for candidates seen by
investors as unwilling to pursue a market-friendly agenda.
    Excluding jailed former President Luiz Inacio Lula da Silva,
who will likely be barred if he registers to run, the Brazilian
survey showed law-and-order congressman Jair Bolsonaro held on
to his lead in early polling ahead of the October elections.
Bolsonaro's statements on economic policy have been erratic.
    The polling data helped to offset the effect of increased
central bank intervention in the wake of a weekslong emerging
market sell-off that drove the Brazilian real and the
Mexican peso to multiyear lows.
    Latin American stock markets were mixed as rising crude
prices lifted shares of oil drillers. 
    
    Key Latin American stock indices at 2130 GMT:    
 Stock indexes                                daily      YTD %
                                                  %     change
                                  Latest     change  
 MSCI Emerging Markets              1168.90    0.38        0.9
 MSCI LatAm                         2843.17   -0.98       0.53
 Brazil Bovespa                    85232.18    0.01      11.56
 Mexico IPC                        46519.29   -0.45      -5.74
 Chile IPSA                         5695.82   -0.12       2.36
 Chile IGPA                        28783.23   -0.05       2.87
 Argentina MerVal                  30441.60    1.97       1.25
 Colombia IGBC                     12362.10    0.02       8.72
 Venezuela IBC                         0.00       0    -100.00
 
 (Additional reporting by Bruno Federowski in Sao Paulo; Editing
by David Gregorio and Lisa Shumaker)
  
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