RPT-EMERGING MARKETS-Mexico peso weighed by US data, real drops on policy doubt

Fri Mar 15, 2013 3:29pm EDT

* US consumer sentiment tumbles to lowest in a year
    * Investors unsure about timing of Brazil rate hike
    * Colombian policymaker hints at interest rate cut
    * Mexico peso flat, Brazil real drops 0.4 pct

    By Walter Brandimarte
    RIO DE JANEIRO, March 15 (Reuters) - Latin American
currencies edged lower on Friday as a decline in U.S. consumer
confidence weighed on the Mexican peso while doubts about future
interest rate hikes in Brazil hit the real.
    The Brazilian real  dropped 0.4 percent to
1.9815 per dollar as investors continued to digest the minutes
of the central bank's latest monetary policy meeting.
    In the document, released on Thursday, policymakers sounded
increasingly concerned about inflation but, at the same time,
said they would be cautious with future policy steps due to
"lingering uncertainties of external and internal origin."
  
    The minutes poured some cold water on expectations that the
central bank would lift its benchmark interest rate from an
all-time low of 7.25 percent - a move that could increase the
allure of Brazilian assets.
    Interest-rate futures declined for two consecutive sessions
in Brazil. The contract maturing in Jan 2014, one of
the most traded, declined 1 basis point to 7.17 percent, after
slumping 10 basis points in the previous session.
    "Investors are still digesting the minutes," said Paulo
Celso Nepomuceno, fixed-income strategist with Coinvalores
brokerage in Sao Paulo. "As we haven't seen (central bank chief
Alexandre) Tombini talking about it, the market remains on alert
to confirm whether its interpretation of the minutes is
correct."
    In Mexico, the peso was practically flat at 12.435
per dollar, weighed by data showing U.S. consumer sentiment
tumbled in early March to its lowest in over a year.
 
    The Mexican peso has had an impressive rally over the past
six sessions and the economic data from its northern neighbor,
which is also the main consumer of Mexican exports, tempered
investors' optimism about the currency.
    The Colombian peso fell 0.4 percent to 1,806.01
per dollar after a policymaker said the central bank has room to
further lower its benchmark interest rate, reducing the allure
of domestic assets. 

    Latin American FX prices at 1911 GMT:  
    
 Currencies                         daily %    YTD %
                                     change   change
                            Latest           
 Brazil real                1.9815    -0.36     2.95
                                             
 Mexico peso               12.4359    -0.01     3.44
                                             
 Chile peso               471.6000    -0.06     1.51
                                             
 Colombia peso           1806.0100    -0.43    -2.22
                                             
 Peru sol                   2.5920     0.04    -1.58
                                             
 Argentina peso             5.0900    -0.05    -3.49

 Argentina peso             8.0300    -0.50   -15.57
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