EMERGING MARKETS-Brazil, Mexico currencies remain stable ahead of Fed meeting
* Brazil's real, Mexico's peso steady ahead of Fed meeting * Fed decision may determine direction of flows into region SAO PAULO, June 17 (Reuters) - Latin American currencies seesawed on Monday ahead of the U.S. Federal Reserve policy meeting this week, as investors awaited signs of how long the U.S. Federal Reserve will decide to continue massive monetary stimulus in the world's biggest economy. The Brazilian real and the Mexican peso have weakened in recent weeks on worries the Fed may soon begin to slow a bond-buying program that pushed U.S. interest rates down toward zero, encouraging a steady inflow of dollars into emerging markets. Fed policymakers meet Tuesday and Wednesday and investors expect signals on whether, and when, the Fed will start scaling back its monthly $85 billion bond purchase program. "If they move ahead, we should see downward pressure" on regional currencies, "especially in the real," said Sidnei Moura, an executive director at São Paulo-based NGO Corretora. "If things stay as they are, we may see some inflows. Market direction entirely depends on the Fed's meeting this week." * The Brazilian real was largely stable on Monday as expectations that the $4.8 billion initial public offering of Votorantim Cimentos SA will help attract a sizable inflow of foreign money. In recent days, foreign funds have exited positions in the equity and bond markets following the government's decision to eliminate a transactions tax on derivatives. * The Mexican peso lost 0.1 percent, in a sign that traders are still attentive to the Fed's Wednesday decision. The currency is currently trading at levels around the 200-day moving average. * The Chilean peso gained less than 0.1 percent on speculation among investors that low inflation is increasingly leaving the central bank with room to cut interest rates. * The Colombian peso weakened 0.1 percent on Monday. Growth likely lost momentum in the first quarter, but low interest rates may limit the ability of policymakers to revive growth in the country, traders said. Latin American FX prices at 14:54 GMT: Currencies daily % YTD % change change Latest Brazil real 2.1524 -0.27 -5.22 Mexico peso 12.7125 -0.02 1.19 Chile peso 492.1000 0.06 -2.72 Colombia peso 1883.2000 -0.07 -6.22 Peru sol 2.7250 -0.07 -6.39 Argentina peso (interbank) 5.3350 -0.05 -7.92 Argentina peso (parallel) 8.5200 0.35 -20.42
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