EMERGING MARKETS-Latam FX weakens as Wall St slips, dollar jumps

Thu May 9, 2013 6:11pm EDT

* U.S. jobless data fuels debate about scaling back Fed
stimulus
    * Brazil launches additional $750 mln of 2023 bond
    * Brazil real drops 0.6 pct, Mexico peso dips 0.1 pct

    By Walter Brandimarte
    RIO DE JANEIRO, May 9 (Reuters) - Latin American currencies
weakened late on Thursday as concern that the U.S. Federal
Reserve could scale back its monetary stimulus program weighed
on risk assets, boosting investors' appetite for the greenback
instead.
    Losses increased late in the afternoon as key Wall Street
indexes fell in the red, halting a five-day rally, and the U.S.
dollar soared to its highest level in over four years against
the Japanese yen.
    The Brazilian real  fell 0.6 percent, its
largest single-day loss in three weeks, to close at 2.0151 per
dollar.
    "It all happened abroad. All currencies got beaten by the
dollar today," said Flavio Serrano, a senior economist with
Espirito Santo Investment Bank in Sao Paulo.
    The Mexican peso weakened to as much as 12.046 per
dollar, but last traded at 11.996 per greenback, 0.13 percent
weaker from Wednesday's close.
    Both currencies spent most of the session flat or slightly
stronger as investors' appetite for risk held steady after a
report showed the number of Americans filing new claims for
jobless benefits fell last week to its lowest level in nearly
5-1/2 years. 
    Also supporting the real earlier in the day was news that
Brazil was selling $750 million in a reopening of its
dollar-denominated global bond due in 2023. 
    Market sentiment worsened later in the day, however, as
investors started speculating that the strength of the U.S.
labor market could allow the U.S. Federal Reserve to scale back
its bond-buying program.
    Dollars injected in the global economy by the Fed's bond
purchases often find their way into higher-yielding emerging
markets, bolstering local currencies.
    In Latin America, the Mexican peso has been one of the
biggest beneficiaries of those inflows as investors grow
increasingly optimistic that a series of structural reforms
carried by the government will boost economic growth in the
country. So far this year, the peso has gained more than 7
percent.
            
    Latin American FX prices at 2200 GMT:
    
 Currencies                         daily %    YTD %
                                     change   change
                            Latest           
 Brazil real                2.0151    -0.64     1.24
                                             
 Mexico peso               11.9960    -0.13     7.24
                                             
 Chile peso               472.0000    -0.21     1.42
                                             
 Colombia peso           1830.1000     0.05    -3.50
                                             
 Peru sol                   2.6000     0.54    -1.88
                                             
 Argentina peso             5.2200    -0.10    -5.89

 Argentina peso             9.9800     4.71   -32.06
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