EMERGING MARKETS-Latam FX little changed on global growth concerns

Mon Mar 4, 2013 2:49pm EST

* US spending cuts, Chinese real state plans weigh on global
markets
    * Interest rate decisions awaited this week in Brazil,
Mexico
    * Brazil real gains 0.2 pct, Mexico peso drops 0.1 pct

    By Walter Brandimarte
    RIO DE JANEIRO, March 4 (Reuters) - Latin American
currencies hovered around the unchanged mark on Monday as news
China was taking steps to cool its property sector, combined
with fears of automatic U.S. spending cuts and Italy's political
uncertainty, to stoke global growth concerns.
    Investors also avoided taking risk in Brazil and Mexico
before key interest-rate decisions later in the week. Mexican
policymakers have warned about a possible interest rate cut.
Analysts see a chance the Brazilian central bank could tighten
monetary policy later this year if inflation continues to gain
speed.  
    Trading volumes were generally low as investors showed
little appetite to take risk in emerging markets, with stock
prices also dropping across the region. 
    "Markets remain on the same track of the previous week,
driven by problems overseas," said Glauber Romano, a trader with
Intercam brokerage in Sao Paulo.
    News that China was considering measures to contain housing
costs fueled growth concerns in the country, the main consumer
of Latin America's commodities exports. 
    The currencies of Mexico, Chile and Colombia
 all traded less than 0.1 percent weaker. The
Brazilian real  gained 0.2 percent, after spending
most of the session trading around Friday's closing price.
    Although most analysts expect the central banks of Brazil
and Mexico to keep interest rates unchanged this week, they will
likely trade cautiously before those monetary policy decisions,
respectively scheduled for Wednesday and Friday.
    Uncertainty about the global economy has been weighing on
Latin American currencies in the past few days as investors
worry about the impact of U.S. budget cuts on the world's
largest economy.
    Political uncertainty in Italy has also increased the
prospect of new bouts of volatility coming from the euro zone.
    
    Latin American FX prices at 1910 GMT:    
 Currencies                         daily %    YTD %
                                     change   change
                            Latest           
 Brazil real                1.9770     0.20     3.19
                                             
 Mexico peso               12.7795    -0.11     0.66
                                             
 Chile peso               474.2000    -0.04     0.95
                                             
 Colombia peso           1813.9000    -0.04    -2.64
                                             
 Peru sol                   2.5960    -0.27    -1.73
                                             
 Argentina peso             5.0525    -0.05    -2.77

 Argentina peso             7.8000     0.51   -13.08
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