EMERGING MARKETS-Latam currencies gain on US data

Mon Oct 1, 2012 1:06pm EDT

* US manufacturing sector expands for 1st time since May
    * Central bank intervention fears curb FX gains in Brazil
    * Mexican peso up 0.4 pct, Brazilian real flat

    RIO DE JANEIRO, Oct 1 (Reuters) - Latin American currencies
gained on Monday as investors kicked off the last quarter of the
year with renewed appetite for risk, eyeing a surprise expansion
in the U.S. manufacturing sector and ongoing monetary stimulus
by major central banks.
    The Mexican peso rose 0.5 percent to 12.8016 per U.S.
dollar after data showed the manufacturing sector of the United
States, Mexico's main trading partner, expanded in September for
the first time since May. 
    The Brazilian real  was flat at 2.0265 per
greenback, however, as investors avoided making strong bets on
the currency for fear of central bank intervention.
    Brazilian policymakers have managed to keep the real weaker
than 2 per dollar -- a level they consider beneficial to
exporters -- since early July.
    "Here the concern is that the central bank will step into
the market if the dollar weakens too much. For now, nobody is
willing to fight the central bank," said Mario Battistel, head
of the currency desk at Fair Corretora, a brokerage in Sao
Paulo. 
    Investors have been revising their estimates for stronger
Latin American currencies as more dollars are expected to flow
into emerging markets as a result of stimulus measures deployed
by the U.S. Federal Reserve and the European Central Bank. 
    They now expect the peso to finish 2012 at 12.88 per dollar,
stronger than the level of 13.01 forecast a month ago, a survey
by the Mexican central bank with private analysts showed.
    In Chile, the peso gained 0.4 percent, recovering
part of the losses seen on Friday, when threats of government
intervention caused the currency to slump the most in seven
weeks. 
    Fears of intervention in Chile have grown after central bank
chief Rodrigo Vergara said policymakers may intervene during
"exceptional periods" in which the exchange rate is
significantly out of line with fundamentals.
    The move by Chile pushed it closer to the stance of
policymakers in Brazil, Colombia and Peru who have been
intervening in markets to fight dollar inflows that have lifted
their currencies and hurt exporters.   
    
    Latin American FX prices at 1640 GMT:
    
 Currencies                         daily %    YTD %
                                     change   change
                            Latest           
 Brazil real                2.0265     0.00    -7.80
                                             
 Mexico peso               12.8190     0.37     8.97
                                             
 Argentina peso*            6.2500     0.80   -24.32
                                             
 Chile peso               472.6000     0.42     9.88
                                             
 Colombia peso          1,797.7500     0.14     7.82
                                             
 Peru sol                   2.5980    -0.08     3.81
                                             
 * Argentine peso's rate between                    
 brokerages
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