October 13, 2017 / 4:54 PM / a year ago

EMERGING MARKETS-Most Latam currencies firm on U.S. price data; Mexico peso slips

    By Bruno Federowski
    SAO PAULO, Oct 13 (Reuters) - Latin American currencies
mostly firmed on Friday after underlying U.S. inflation remained
tame in September, casting doubt over the prospect of a December
interest rate hike.
    U.S. consumer prices rose 0.1 percent in September excluding
volatile food and energy components, data from the Labor
Department showed, even as headline inflation came in at the
fastest in eight months.
    A 13.1 percent surge in gasoline prices due to
hurricane-related production disruptions at oil refineries
accounted for three-quarters of the increase in the headline
    The mixed report comes as Federal Reserve officials have
been engaged in a vigorous debate over why inflation remains
muted despite shrinking slack in the economy.
    "Uncertainty surrounding inflation suggests that a December
rate hike is still not a done deal. But we continue to believe
it is likely," economists at Nordea wrote in a report.
    The currencies of Brazil, Chile and Colombia
 firmed between 0.1 and 0.4 percent, supported by
expectations that a slow path of U.S. rate hikes could bolster
demand for high-yielding assets.
    The Mexican peso, however, bucked the trend,
touching a new five-month low on concerns over the future of
Mexico's trade ties with the United States.
    The United States on Friday unveiled hotly contested
proposals for higher regional autos content in the North
American Free Trade Agreement, three people told Reuters,
casting further doubt on the chances of reaching a deal to
modernize the pact.
    Brazil's benchmark Bovespa stock index rose 0.3
percent and hovered around the 77,000 mark, tracking commodity
prices higher after stronger-than-expected Chinese trade
figures. Shares of producers of basic products such as iron ore
miner Vale SA and oil company Petróleo Brasileiro SA
 led the rally.
    Preferred shares in Oi SA jumped 20 percent,
their biggest daily gain in seven months, after the phone
company submitted a debt-restructuring plan seen as strongly
beneficial to stockholders.
    Still, analysts warned the plan may not be approved by
creditors, who could be forced to take heavy losses on their

    Key Latin American stock indexes and currencies at 1645 GMT:
 Stock indexes                               daily %   YTD %
                                              change  change
 MSCI Emerging Markets              1126.81     0.46   30.08
 MSCI LatAm                         2959.74     0.31   26.05
 Brazil Bovespa                    76883.08     0.29   27.65
 Mexico S&P/BVM IPC                49994.49     0.06    9.53
 Chile IPSA                         5458.94     0.44   31.50
 Chile IGPA                        27331.25     0.41   31.82
 Argentina MerVal                  27093.69     0.13   60.15
 Colombia IGBC                     11058.28    -0.02    9.18
 Venezuela IBC                       532.85     0.15  -98.32
 Currencies                                  daily %   YTD %
                                              change  change
 Brazil real                         3.1580     0.35    2.89
 Mexico peso                        18.9350    -0.18    9.55
 Chile peso                          623.35     0.14    7.60
 Colombia peso                      2934.37     0.18    2.29
 Peru sol                             3.249     0.12    5.08
 Argentina peso (interbank)         17.3475     0.42   -8.49
 Argentina peso (parallel)            17.83     0.34   -5.66
 (Reporting by Bruno Federowski)
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