RPT-EMERGING MARKETS-Mexico peso slips on Spain worries, Brazil real up

* Investors push Spain to seek financial aid
* Brazil central bank holds off currency interventions
* Effect of Fed stimulus wanes

By Natalia Cacioli and Louise Egan
SAO PAULO/MEXICO CITY, Sept 18 (Reuters) - The Mexican peso
weakened o n T uesday as concerns about Spain's willingness to ask
for an aid package curbed investor appetite for emerging market
assets, offsetting any strengthening effect from the latest
round of U.S. monetary stimulus.
The Brazilian real ended slightly stronger, however, and
even though the central bank did not intervene as it did on
Monday, Finance Minister Guido Mantega made it clear
policymakers would not hesitate to prevent the currency from
appreciating. [ID: nL5E8KICU6]
Mexico's peso, Latin America's most traded currency,
slipped 0.22 percent to 12.7950 per dollar as investors worried
that the European debt crisis could get worse again if Spain
delays a request for international aid they deem as inevitable.

It was the second straight day of minor setbacks for the
peso after it had surged to more than a five-month high on
Friday on bets that the U.S. Federal Reserve's third round of
bond-buying would push a flood of cash into the region.
But the effects of the Fed's aggressive move so far seem
milder than in the previous two rounds of money printing, said
Enrique Alvarez, senior economist at IDEAglobal, though it is
still too early to say for certain.
"The initial impact at this point is being attenuated by the
usual jitters on the side of Europe," he said.
"As long as that occurs, it takes away from the positives
that were set in the market by the Fed's latest plan to go ahead
and buy mortgages."
The lack of volume and of key economic data left the market
more vulnerable to swings in investor sentiment, analysts said.
In Brazil, the real bid 0.35 percent stronger at 2.0225 per
dollar at the local market close as the central bank refrained
from intervening in the market for the first session in three.
Still, the currency remained within the narrow range of 2.0-2.1
per greenback it has been trading in since early July.
"The central bank interventions left the real decoupled from
overseas markets," said Jankiel Santos, chief economist at BES
Investimentos in Sao Paulo. "As much as investors want to sell
dollars, the central bank has intervened much more than expected
and that has kept the real at weaker levels."
Brazil's central bank has been intervening more aggressively
in the foreign exchange market to offset possible dollar inflows
stemming from the stimulus measures announced by the U.S.
Federal Reserve last week.
In less than one week, the Brazilian bank has sold about
$5.7 billion worth of reverse currency swaps in four separate
auctions, whenever the real strengthened toward the level of 2
per dollar. Those swaps emulate the purchase of dollars in the
futures market, weakening the real as a result.
In a sign that the government could make use of yet other
measures to keep a lid on the real, Finance Minister Guido
Mantega on Tu esday repeated that Brazil will continue to take
measures to offset the impact of the Fed's monetary stimulus.

In Peru, the sol currency finished stable after the
central bank bought $40 million on the local spot market.
In Chile, financial markets were closed for a national
holiday and will reopen on Thursday.

Latin American FX prices at 2130 GMT:

Currencies daily % year-to-
change ate %
Latest change
Brazil real 2.0226 0.35 -7.62

Mexico peso 12.8000 -0.25 9.14

Argentina peso* 6.2900 0.16 -24.80

Chile peso 470.6000 0.0 10.35

Colombia peso 1,795.5000 0.17 7.96

Peru sol 2.6020 0.00 3.65

* Argentine peso's rate between
brokerages