November 18, 2019 / 8:54 PM / 19 days ago

EMERGING MARKETS-Trade uncertainty casts a pall on Latam currencies; Brazil's real hits life low

 (Updates prices; adds quote, news items)
    * Brazil's real hits record low
    * Beijing 'pessimistic' on trade deal -CNBC report 
    * Argentina, Mexico stock markets shut for holiday

    By Medha Singh and Agamoni Ghosh
    Nov 18 (Reuters) - Latin American currencies started the
week with declines as conflicting headlines surrounding
U.S.-China trade talks kept investors on the sidelines, while
Brazil's real closed at an all-time low.
    MSCI's index for Latin American currencies
slipped 0.3%, resuming its downward trend as it fell for the
tenth time in the last eleven sessions. 
    Sentiment took a hit earlier in the day after CNBC reported
that the mood in Beijing was "pessimistic" because of U.S.
President Donald Trump's reluctance to roll back tariffs.

    However, the Trump administration issued a new 90-day
extension that allowed U.S. companies to continue doing business
with China's Huawei Technologies Co Ltd         , which tempered
the initial losses.
    "This week, we are going to be range-bound but that range
will be decided by the trade headlines," said Christian
Lawrence, senior market strategist at Rabobank. 
    A slide in oil prices also weighed on currencies of net
crude exporters such as Mexico and Colombia's peso
.
    
    REAL CURRENCY AT LIFE LOW 
    Brazil's real reversed course to drop marginally as
traders pushed the currency through the key level where the
central bank had intervened in August by selling dollars on the
spot market.
    "Looking at the fundamentals, the real at 4.20 per U.S.
dollar, does not seem to justify its level," said Wilson
Ferrarezi, Brazil economist at TS Lombard. 
    "This could indicate the currency is oversold, especially
because important reforms like the pension reform have already
been approved by the Congress."
    The currency has dropped about 8% this year as the economy
sluggishly recovers from a deep recession and struggles to cope
with a mounting fiscal deficit.
    Stocks in Sao Paulo were marginally lower as
investors returned from a long weekend. Among prominent movers,
Marfrig Global Foods SA rose 5% after the food
processor announced it raised its stake in U.S. meatpacker
National Beef Packing Company to 81.7% from 51%.
    The Chilean peso fell slightly as a drop in copper
prices hit the currency of the world's biggest producer of the
red metal. 
    The peso had jumped about 4% in the prior session as
lawmakers on Friday agreed to hold a referendum to overhaul the
country's dictatorship-era constitution.
    Chile's stocks pared back slightly after posting
their best one-day percentage jump in 11 years in the previous
session.
    Trading was subdued on Monday as stock markets in Mexico and
Argentina were shut for holidays.
    
    Key Latin American stock indexes and currencies at 2010 GMT:
    
 Stock indexes                                  daily % change
                             Latest            
 MSCI Emerging Markets                1051.32             0.24
                                               
 MSCI LatAm                           2675.09            -0.54
                                               
 Brazil Bovespa                     106480.95            -0.07
                                               
 Mexico IPC                                 -                -
                                               
 Chile IPSA                           4814.17            -0.97
                                               
 Argentina MerVal                           -                -
                                               
 Colombia IGBC                           0.00                0
                                               
                                                              
 Currencies                                     daily % change
                                       Latest  
 Brazil real                           4.2054            -0.24
                                               
 Mexico peso                          19.3022            -0.65
                                               
 Chile peso                            775.53            -0.46
                                               
 Colombia peso                         3439.5            -0.47
 Peru sol                               3.372            -0.27
                                               
 Argentina peso (interbank)                 -                -
                                               
 

 (Reporting by Medha Singh and Agamoni Ghosh in Bengaluru)
  
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