RPT-EMERGING MARKETS-Mexico peso dips to 2-week low, Brazil real slips
* Mexico bond yields post biggest jump higher in 9 months * Mexico peso slips 0.31 pct, Brazil real off 0.57 pct MEXICO CITY, May 14 (Reuters) - Mexico's peso slipped to its weakest since the start of the month on Tuesday on concerns that a stronger U.S. economy could lead to a pull-back of monetary stimulus that has supported demand for riskier emerging market currencies. Brazil's real also weakened after a recent series of solid U.S. data backed recent speculation about when the U.S. Federal Reserve could slow or even stop its $85 billion per month buying of Treasuries and mortgage-backed securities. Asset purchase programs by central banks in advanced economies have dampened yields in their markets, pumping up global flows to higher-yielding emerging markets. "We are seeing signs of economic recovery in the United States, this is lifting stock markets, and it makes you think that the Fed could be discussing the reduction of its non-conventional monetary policy," said Salvador Orozco, a strategist at Santander in Mexico City. The cost of dollars in Mexican pesos rose to hit resistance around 12.2155 per dollar, the peso's weakest since May 1, before bouncing back to 12.1975, 0.31 percent weaker on the day. Brazil's real slid 0.57 percent to bid at 2.0202 per dollar. Interest rates on U.S. Treasuries have spiked higher since last week amid concerns the Fed could taper off its bond purchases. That has driven up yields in Mexico in tandem. The yield on Mexico's benchmark 10-year peso bond bid up 5 basis points to 4.65 percent, its highest since mid-April. The yield has shot up 23 basis points from a record low close of 4.42 percent last Thursday in its biggest three-day spike since August 2012, according to Reuters data. Ultra-low interest rates in developed economies have fueled record investments in peso-denominated debt since 2010, driving Mexican yields down to successive record lows. Orozco said his bank had not seen signs of outflows from foreigners yet, but that there was a pause in new flows. "But just the lack of new flows is enough to hit the peso," he said. Latin American FX prices at 2050 GMT: Currencies daily % YTD % change change Latest Brazil real 2.0202 -0.57 0.98 Mexico peso 12.1975 -0.31 5.47 Chile peso 477.2000 -0.17 0.31 Colombia peso 1839.4500 -0.30 -3.99 Peru sol 2.6020 -0.12 -1.96 Argentina peso 5.2325 0.00 -6.12 Argentina peso 9.1500 9.62 -25.90
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