EMERGING MARKETS-Latam currencies drop on global growth concerns

Thu Apr 18, 2013 4:52pm EDT

* US jobless claims rise, factory data falters
    * Brazil disappoints investors who expected larger Selic
rate hike
    * Brazil real falls 0.9 pct, Mexico peso drops 0.5 pct

    By Walter Brandimarte
    RIO DE JANEIRO, April 18 (Reuters) - Latin American
currencies fell for a second consecutive day on Thursday after
weak U.S. jobs and factory data added to global economic growth
concerns, reducing investors' appetite for risk.
    The Brazilian real  slid as much as 1.0 percent,
also hurt by a central bank decision on Wednesday to tighten
monetary policy less aggressively than investors had priced in.
 
    The real ended at 2.0165, 0.9 percent lower, one day after
the central bank announced it was raising its benchmark Selic
interest rate by 25 basis points, half what investors expected.
    More modest increases in the Selic, which had stood at an
all-time low of 7.25 percent since October, mean the allure of
real-denominated assets will not be as great as investors
imagined.
    "There was a certain frustration in the market, considering
the possibility of a larger Selic hike," said Jankiel Santos,
chief economist with Espirito Santo Investment Bank in Sao
Paulo. "With a lower interest-rate differential, appetite for
buying (the real) is lower."
    The Mexican peso dropped as much as 0.9 percent to a
two-week low as investors pocketed recent currency gains. It
last traded at 12.2762 per dollar, 0.5 percent lower.
    The losses were triggered by data showing a rising number of
claims for unemployment benefits in the United States, Mexico's
main trading partner.
    "Dollars are flowing out of stocks and we could also have
outflows from the forex market, where investors who were long
pesos are now taking profits," said Luis Rodriguez, director of
analysis with Finamex brokerage in Guadalajara.   
    Adding to the worrisome growth outlook, another report
showed that factory activity in the U.S. Mid-Atlantic region
cooled in April. 
    The Chilean peso lost 0.2 percent to close at
475.60 per dollar, its weakest level since December 28, as
prices for the country's top export copper hit a session
low of less than $7,000 a ton for the first time in 18 months.
    "The lousy performance of markets in recent days and the
sharp drop copper prices have seen have prompted local dollar
buying," a trader in Santiago said. "Additionally, there's been
strong demand for dollars by foreign banks and brokers."
     
    Latin American FX prices at 2045 GMT:
    
 Currencies                           Daily  YTD pct
                                        pct   change
                            Latest   change  
 Brazil real                2.0165    -0.90     1.17
                                             
 Mexico peso               12.2762    -0.46     4.79
                                             
 Chile peso               475.6000    -0.19     0.65
                                             
 Colombia peso           1841.3500     0.42    -4.09
                                             
 Peru sol                   2.5920     0.00    -1.58
                                             
 Argentina peso             5.1575     0.00    -4.75

 Argentina peso             8.6300     0.81   -21.44
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