EMERGING MARKETS-Latam currencies gain modestly after Fed

Wed Dec 12, 2012 3:29pm EST

* Fed pledges to pump more money into the U.S. economy
    * Chilean peso gains for 7th session to 2-month high
    * Brazil real gains 0.1 pct, Mexico peso flat

    By Walter Brandimarte
    RIO DE JANEIRO, Dec 12 (Reuters) - Latin American currencies
rose modestly on Wednesday after the Federal Reserve pledged to
inject more money into the U.S. economy, potentially driving up
dollar inflows to emerging markets.
    The Fed's decision to replace an expiring stimulus program
with a fresh round of Treasury debt purchases, combined with its
pledge to keep interest rates near zero until the jobless rate
falls to 6.5 percent, is likely to keep alive investor appetite
for emerging-market currencies and stocks.   
    A number of domestic factors curbed gains in Latin American
foreign exchange markets, however. 
    In Mexico, a holiday kept local markets closed, leaving the
peso to trade nearly unchanged at 12.740 per dollar in
overseas trading. 
    In Chile, investors grew increasingly cautious of a possible
central bank intervention as the peso gained for a
seventh consecutive session. 
    The Chilean currency ended 0.17 percent higher at 474.20 per
dollar, its strongest level in two months, also helped by a rise
in prices of copper, the country's main export product.
    Brazil's real  ended 0.1 percent stronger at
2.0742 per dollar, also supported by two central bank auctions
of dollars with repurchase agreements. 
    The auctions are aimed at providing dollar liquidity at
year-end, but also suggest the central bank does not want the
real to weaken too much for fear of inflation.
    "The recent actions and comments from central bank officials
show the bank wants a stronger real as they fear inflation
pressures," said Sidnei Nehme, a director at NGO brokerage in
Sao Paulo.

    Latin American FX prices at 2015 GMT:
    
 Currencies                           Daily  YTD pct
                                        pct   change
                            Latest   change  
 Brazil real                2.0742     0.13    -9.79
                                             
 Mexico peso               12.7400    -0.03     9.65
                                             
 Argentina peso*            6.4600    -0.31   -26.78
                                             
 Chile peso               474.2000     0.17     9.51
                                             
 Colombia peso          1,794.6500     0.33     8.01
                                             
 Peru sol                   2.5650     0.23     5.15
                                             
 * Argentine peso's rate between                    
 brokerages
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A couple walks along the rough surf during sunset at Oahu's North Shore, December 26, 2013. REUTERS/Kevin Lamarque

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