EMERGING MARKETS-Latam currencies drop on world growth concerns

Thu Feb 21, 2013 5:21pm EST

* Weak economic data in Europe, U.S. spark growth concerns
    * Investor fret over future of U.S. stimulus for 2nd day
    * Brazil real drops 0.4 percent, Mexican peso falls 0.1
percent

    By Natalia Cacioli
    SAO PAULO, Feb 21 (Reuters) - Latin American currencies
weakened on Thursday for a second consecutive session after a
series of weak economic data in the United States and Europe
fueled concern about the global economy, driving investors to
the perceived safety of the dollar.
    The data, which showed deteriorating business conditions in
Europe and the United States, as well as a struggling U.S. labor
market, came as investors still fretted about a Federal Reserve
threat to scale down or withdraw its monetary stimulus program
before expected. 
    Concerns about the end of the U.S. stimulus increased after
minutes of the Fed's latest monetary policy meeting released on
Wednesday showed a number of policymakers were worried about the
costs and the efficacy of that program.
    "The possibility that the Fed might slow down its
bond-buying program reduces the expectation of abundant global
liquidity," said Reginaldo Galhardo, a currency desk manager at
Treviso brokerage in Sao Paulo.
    "That, in addition to very poor euro zone data, results in
risk aversion."
    Brazil's currency, the real  led losses in the
region as it dropped 0.4 percent to 1.9721 per U.S. dollar.
    Investors expect the real to stay in a narrow range between
1.95 and 2.0 per dollar in the short term as a number of
Brazilian policymakers, including Finance Minister Guido
Mantega, say the government favors a stable currency from now on
to avoid additional inflation pressures. 
    The Mexican peso declined 0.1 percent to 12.74 per
dollar, while the Chilean peso ended practically
unchanged at 473.20 per dollar.
    
    Latin American FX prices at 2210 GMT:
    
 Currencies                         daily %    YTD %
                                     change   change
                            Latest           
 Brazil real                1.9721    -0.39     3.44
                                             
 Mexico peso               12.7400    -0.10     0.86
                                             
 Chile peso               473.2000    -0.04     1.16
                                             
 Colombia peso           1799.0000    -0.38    -1.83
                                             
 Peru sol                   2.5870    -0.19    -1.39
                                             
 Argentina peso             5.0275    -0.10    -2.29

 Argentina peso             7.8100     0.00   -13.19
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