February 11, 2019 / 2:05 PM / in 2 months

EMERGING MARKETS-Strong dollar pressures Latam currencies

    By Susan Mathew
    Feb 11 (Reuters) - Most Latin American currencies weakened
against a firmer dollar on Monday, with Brazil's real heading
for its longest losing streak in five years.
    Uncertainty regarding the outcome of U.S.-China trade talks
this week had investors seeking safety, keeping the greenback in
demand.
    Brazil's real fell 0.2 percent, declining for the
seventh consecutive session. In January 2014, it fell for eight
straight sessions. 
    Much anticipated pension reforms in Brazil have been on hold
as Brazilian President Jair Bolsonaro recovers from a surgery.
     You Na Park, analyst at Commerzbank said risks for the real
remain elevated. "Apart from the pension reform, domestic
political risks in Brazil remain high for the time being ... It
remains to be seen to what extent Bolsonaro will give his
economics minister (Paulo) Guedes a free hand," she said in a
note. 
    "Additionally, inexperienced ministers dominate Bolsonaro's
cabinet ... We have to wait and see how well the cooperation
between the government and the highly fragmented parliament will
work. If difficulties emerge, BRL could quickly come under
depreciation pressure again."
    The Mexican peso slipped slightly. Commerzbank's Park
says the peso's weakness should be less pronounced looking
ahead.
    "In the course of next year, the market should have become
more accustomed to the new president's style, and it should
become increasingly apparent that the shift to the left will be
moderate. Against the backdrop of a credible central bank and
high interest rates, the peso is then expected to recover
somewhat," wrote Park.
    In Chile, the peso fell 0.3 percent on lower copper
prices as state miner Codelco said it hoped to soon restart
operations at its northern Chuquicamata mine, which suspended
operations in the face of rains that were the heaviest in more
than 40 years.
    Meanwhile, shares in Brazil fell half a percent with
most sectors in the red. Banks drove the declines with Itau
Unibanco Holding and Banco Bradesco
dropping more than 0.8 percent each.
        
    Key Latin American stock indexes and currencies at 1346 GMT:
    Stock indexes             Latest    Daily %
                                         change
 MSCI Emerging Markets         1037.56      0.15
                                        
 MSCI LatAm                    2842.48      -0.3
                                        
 Brazil Bovespa               94742.98     -0.63
                                        
 Mexico IPC                          -         -
                                        
 Chile IPSA                    5388.09      0.17
                                        
 Argentina MerVal                    -         -
                                        
 Colombia IGBC                       -         -
                                        
                                                
       Currencies             Latest    Daily %
                                         change
 Brazil real                    3.7364     -0.13
                                        
 Mexico peso                   19.0967     -0.14
                                        
 Chile peso                      659.5     -0.20
                                        
 Colombia peso                       -         -
 Peru sol                            -         -
                                        
 Argentina peso                      -         -
 (interbank)                            
                                        
 

 (Reporting by Susan Mathew in Bengaluru;)
  
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