RPT-EMERGING MARKETS-Mexico peso rebounds from losses, Brazil real dips

Mon May 27, 2013 3:50pm EDT

RIO DE JANEIRO, May 27 (Reuters) - The Mexican peso gained
on Monday after recording its worst weekly loss in almost a
year, but the Brazilian real and the Chilean peso weakened amid
low trading volume due to a U.S. holiday.
    Latin American currencies have posted losses over the past
two weeks on concerns that the U.S. Federal Reserve may soon cut
back on stimulus measures that have provided a steady source of
dollars seeking higher returns in emerging markets.
    With U.S. investors out for the U.S. Memorial Day holiday on
Monday, investors avoided making big bets in Latin American
markets.
    "Today we had a dead session. The market barely moved with
the U.S. holiday," said Reginaldo Siaca, a currency trader with
Advanced brokerage in Sao Paulo.
    * The Mexican peso gained 0.4 percent after weakening
1.8 percent in the previous week, its worst weekly performance
since June 2012.
    * The yield on Mexico's benchmark 10-year peso bond
 bid up 2 basis points to 5.12 percent, its highest
since early February. The bond's yield has shot up 63 basis
points so far this month, and it is on track for its biggest
monthly surge since November 2010.
    * Mexican yields have spiked on concerns the U.S. Federal
Reserve could taper its bond-purchasing stimulus program this
year. Traders said Mexican pension funds, flush with cash from
mid-year coupon payments and workers' dues, could fuel a dive
lower in bond yields if data cast doubt on the strength of the
U.S. economy.
    * The Brazilian real  dipped 0.2 percent as
traders said some dollar outflows pressured the exchange rate in
a thin-volume session.
    * The Chilean peso dropped 0.4 percent to 490.00
per dollar, its weakest level in over 10 months.

    Latin American FX prices at 1925 GMT:
    
 Currencies                         daily %    YTD %
                                     change   change
                            Latest           
 Brazil real                2.0552    -0.20    -0.74
                                             
 Mexico peso               12.4790     0.41     3.09
                                             
 Chile peso               490.0000    -0.37    -2.31
                                             
 Colombia peso             holiday    n/a      n/a
                                             
 Peru sol                   2.6780     0.30    -4.74
                                             
 Argentina peso             5.2650     0.05    -6.70

 Argentina peso             8.8800     0.79   -23.65
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