EMERGING MARKETS-Brazil, Mexico currencies slip before Fed meeting

Wed Sep 11, 2013 12:31pm EDT

SAO PAULO, Sept 11 (Reuters) - Brazil's and Mexico's
currencies weakened on Wednesday as investors took a more
cautious approach ahead of next week's U.S. Federal Reserve
    The Brazilian real  was down 0.46 percent after
strenghtening for six days in a row, while the Mexican peso
 slipped 0.10 percent after a three-day rise.
    Other Latin American currencies were mixed, with the
Colombia peso gaining 0.75 percent.
    Volatility in emerging-market currencies has spiked over the
past few months as investors brace for an expected reduction in
monetary stimulus from the U.S. central bank, which could begin
as early as this month.
    The planned rollback in U.S. stimulus triggered an exodus of
foreign capital that has put at risk the balance of payments of
many countries. The stimulus tapering hinges on a stronger
recovery of employment in the United States.   
    Weaker-than-expected jobs numbers in the United States last
week triggered speculation that the Fed could delay plans to
reduce its bond-buying program, supporting emerging-market
currencies over the past few days.
    "This rise (in the U.S. dollar against emerging-market
currencies) today is absolutely natural, is a recovery from the
previous sessions' moves," said Caio Sasaki, head of research at
Brazilian brokerage XP Investimentos.
    The Fed's next monetary policy meeting will take place on
Sept. 17 and 18. 
 Currencies                                daily %      YTD %
                                            change     change
 Brazil real                     2.2911      -0.46     -10.96
 Mexico peso                    13.0910      -0.10      -1.73
 Chile peso                    502.2000       0.76      -4.68
 Colombia peso                1922.5500       0.75      -8.14
 Peru sol                        2.7870       0.22      -8.47
 Argentina peso                  5.7200      -0.13     -14.12

 Argentina peso (parallel)       9.2100       0.00     -26.38