UPDATE 1-EMERGING MARKETS-Mexico peso up, real drops on policy doubt

Fri Mar 15, 2013 10:37pm EDT

* U.S. 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 up on U.S. data, Brazil real drops 0.14 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 0.14 percent to
1.9840 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.
    "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 up 0.16 percent at 12.4150
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 in recent
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 0.43 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 1100 GMT:  
    
 Currencies                               daily %     YTD %
                                           change    change
                                 Latest            
 Brazil real                     1.9813     -0.14     -3.25
                                                   
 Mexico peso                    12.4150      0.16     -3.36
                                                   
 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 (interbank)      5.0900     -0.05     -3.49
                                                   
 Argentina peso (parallel)       8.0300     -0.50    -15.57
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