June 28, 2019 / 8:16 PM / 3 months ago

EMERGING MARKETS-Most Latam currencies dip in caution as G20 gets underway

 (Updates to close)
    By Sruthi Shankar
    June 28 (Reuters) - Most Latin American currencies fell on
Friday, with the Brazilian real leading losses, ahead of a
high-stakes meeting between U.S. and Chinese leaders over their
trade dispute that has roiled financial markets for months.
    U.S. President Donald Trump said on Friday he hoped for
productive talks with Chinese President Xi Jinping, set to be
held at the sidelines of a Group of 20 (G20) summit in Osaka,
but said he had not made any promises about a reprieve from
escalating tariffs.
    While most traders do not see both sides striking a trade
deal, Trump is expected to refrain from imposing new tariffs on
Chinese goods.
    "The broad consensus is that they will agree to resume talks
and at best, the U.S. will pledge to hold off from imposing
remaining sanctions for now," RBC's global head of FX strategy,
Elsa Lignos, wrote in a note.
    The Brazilian real was down about 0.5%, giving back
much of its gains made on Thursday after the government's
special congressional pension coordinator Samuel Moreira said
there was still time to vote on pension reform in June, even
after a committee meeting was canceled on Thursday.
    The central bank said on Friday Brazil's public finances
swung back into the red in May with the primary deficit widening
sharply from a year ago, although overall national debt as a
share of the economy fell unexpectedly.
    However, Sao Paulo-listed shares rose 0.2%, with
industrial companies leading gains. The Bovespa is trading near
record levels after a 14.9% climb so far this year.
    Other currencies in the region stayed largely flat, with the
Mexican peso holding steady after the Bank of Mexico kept
rates unchanged on Thursday, as expected.
    President Andres Manuel Lopez Obrador said on Thursday that
Mexico's state oil company Pemex           signed an $8 billion
syndicated loan with more than 20 banks to renew credit lines
and refinance liabilities. 
    The peso has been hit by recent credit downgrades for the
indebted firm. Mexican stocks fell 0.6%, dragged down by
airport operators. 
    Peru's sol ended lower after its central bank
intervened in the foreign exchange market by buying $20 million
and the Colombian peso also weakened. 
    The Argentine peso closed up 0.4%, but has shed over
11% in the first six months of the year, making it among the
worst-performing emerging currencies so far this year as the
country faces recession and runaway inflation rates. 
    
    Latin American stock indexes and currencies at 1952 GMT
    
    
 Stock indexes                       daily %
                            Latest    change
 MSCI Emerging Markets      1054.67    -0.02
                                     
 MSCI LatAm                 2841.18     0.51
                                     
 Brazil Bovespa           100920.09     0.19
                                     
 Mexico IPC                43110.12    -0.48
                                     
 Chile IPSA                 5065.77    -0.16
                                     
 Argentina MerVal          41655.86     1.28
                                     
 Colombia IGBC             12606.02     0.04
                                     
                                            
 Currencies                          daily %
                                      change
                             Latest  
 Brazil real                 3.8380    -0.50
                                     
 Mexico peso                19.1873    -0.05
                                     
 Chile peso                  676.85     0.36
                                     
 Colombia peso                 3211    -0.46
                                     
 Peru sol                     3.294    -0.15
                                     
 Argentina peso             42.4500     0.64
 (interbank)                         
                                     
 

 (Reporting by Sruthi Shankar in Bengaluru, Editing by Nick
Zieminski and Lisa Shumaker)
  
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