July 27, 2018 / 7:58 PM / in 3 months

EMERGING MARKETS-UPDATE 1-LatAm currencies firm or flat on mixed U.S. data

 (Updates with recent prices, adds Mexico detail)
    By Bruno Federowski
    BRASILIA, July 27 (Reuters) - Latin American currencies
strengthened or were flat on Friday in the wake of mixed U.S.
growth data that failed to reassure investors that trade
frictions would not be a headwind in the second half of 2018.
    The U.S. government reported gross domestic product grew at
a 4.1 percent annualized pace in the second quarter, matching
the median forecast among economists polled by Reuters.
Economists cautioned the surge was partly driven by one-time 
factors, including a $1.5 trillion tax cut package.
  
    Against a basket of currencies, the greenback fell
0.1 percent.
    Traders bet a weak U.S. economy could drive the Federal
Reserve to increase interest rates at a slower-than-expected
pace, boosting the allure of high-yielding assets. That could be
accentuated by the impact of a potential trade war between the
United States and China on global growth.
    Currencies from Chile and Peru firmed
between 0.9 percent and 0.28 percent by mid-afternoon trading.
Mexico's peso has rallied through the week, but was
mostly flat on Friday afternoon as investors awaited more
details from ongoing negotiations on the North American Free
Trade Agreement (NAFTA).
    The Brazilian real gained 0.92 percent, supported by
investor hopes that the winner of this year's presidential
election will implement an agenda of austerity and deregulation
seen as key to restoring Brazil's investment grade rating.
    A centrist coalition on Thursday united behind
business-friendly presidential candidate Geraldo Alckmin,
boosting the chances of a reformist winning the October
election. The businessman tipped to be Alckmin's running mate,
however, declined the offer.
    
    Key Latin American stock indexes and currencies at 1920 GMT:
 Stock indexes                                daily %    YTD %
                                  Latest       change   change
 MSCI Emerging Markets              1092.06      0.27    -5.98
                                                       
 MSCI LatAm                         2721.87      0.52    -4.25
 Brazil Bovespa                    79681.87      0.35     4.29
 Mexico IPC                        49579.76      0.29     0.46
 Chile IPSA                         5369.64     -1.34    -3.50
 Chile IGPA                        27089.86     -1.12    -3.18
 Argentina MerVal                  29091.48     -0.39    -3.24
 Colombia IGBC                     12143.35     -0.27     6.80
 Venezuela IBC                     93631.55     -1.05  7312.60
                                                              
 Currencies                                   daily %    YTD %
                                               change   change
                                     Latest            
 Brazil real                         3.7118      0.92   -10.74
                                                       
 Mexico peso                        18.6340     -0.03     5.72
                                                       
 Chile peso                           641.1      0.92    -4.13
 Colombia peso                         2885     -0.05     3.36
 Peru sol                             3.263      0.28    -0.80
                                                       
 Argentina peso (interbank)         27.3250      0.31   -31.93
                                                       
 Argentina peso (parallel)            28.55      0.00   -32.64
                                                       
 
 (Reporting by Bruno Federowski 
Additional reporting by Sheky Espejo
Editing by James Dalgleish and Dan Grebler)
  
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