EMERGING MARKETS-Brazil real weakens on S&P warning, peso firms

Fri Jun 7, 2013 4:36pm EDT

MEXICO CITY, June 7 (Reuters) - Brazil's real weakened on
Friday after Standard & Poor's warned it could eventually cut
the country's credit rating, while Mexico's peso firmed after
U.S. jobs data suggested the Federal Reserve would not soon trim
its stimulus measures.
    The real slumped back toward a four-year low it hit last
week after Standard & Poor's late Thursday revised its outlook
on long-term ratings for Brazil's sovereign debt to negative
from stable.
    The rating agency cited deteriorating fiscal fundamentals
and slow economic growth under left-leaning President Dilma
Rousseff. 
    * Mexico's peso firmed 0.4 percent to 12.7580 per
dollar after U.S. payrolls rose by 175,000 in May, a pace that
was not seen as strong enough to suggest an immediate Fed exit
from its buying of $85 billion per month in Treasuries and
mortgage-backed securities. 
 
    * Further supporting the peso, Mexico's central bank held
interest rates steady on Friday at 4.0 percent. A sharp slump in
the currency last month undermined arguments for lower Mexican
borrowing costs. 
    * The net number of bets on a stronger peso on the Chicago
exchange fell to $3.26 billion, their lowest level since August
2012, in the week ending June 4, down from about $4.78 billion
in the prior week. 
    * The Brazilian real shed nearly 0.5 percent to
2.1316 per dollar after S&P's warning added to concerns about a
weak domestic economy and rising inflation pressure that has
weighed on the real this year. 
    * Yields on interest rate futures edged higher
after data showed Brazil's annual inflation rate in May inched
higher to 6.5 percent, hitting the government limit for
acceptable price increases. 

    
    Latin American FX prices at 1930 GMT:
 Currencies                               Daily   YTD pct
                                           pct     change
                               Latest    change  
 Brazil real                   2.1316     -0.47     -4.40
                                                 
 Mexico peso                  12.7580      0.41      0.83
                                                 
 Chile peso                  501.5000      0.62     -4.55
                                                 
 Colombia peso              1892.0000      0.66     -6.66
                                                 
 Peru sol                      2.7240      0.37     -6.35
                                                 
 Argentina peso                5.2975      0.09     -7.27

 Argentina peso                8.5200      0.35    -20.42
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A couple walks along the rough surf during sunset at Oahu's North Shore, December 26, 2013. REUTERS/Kevin Lamarque

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