CORRECTED-EMERGING MARKETS-Latam currencies dip, Fed stimulus cheer wanes

Fri Sep 20, 2013 5:22pm EDT

(Corrects real's Wednesday 3-month high to 3-week high in
second paragraph)
    MEXICO CITY, Sept 20 (Reuters) - Latin American currencies
slid Friday after a U.S. Federal Reserve official said the Fed
could start winding down its stimulus program from October,
which eroded some of the optimism that followed the Fed's recent
decision to maintain stimulus.
     Brazil's real  slipped 0.16 percent to trade at
2.2035 per dollar, its second day of losses after the Fed's
Wednesday announcement that it will stand pat on stimulus for
now helped the currency post its strongest gains in nearly a
month.     
    "We saw a bit of euphoria with the Fed decision, but the
international market is making its adjustments. Our situation is
the same here as it was before the Fed," said Reginaldo
Galhardo, head of foreign exchange at Treviso Corretora en Sao
Paolo, who expects the currency to settle in the 2.2 to 2.3
reais per dollar range.
    The Fed's unprecedented $85 billion monthly bond buying
program had supported investor appetite for risky assets and
expectations of its wind-down had spurred volatility across
emerging markets. 
    Comments from St. Louis Fed President James Bullard early on
Friday that the Fed could wind down stimulus at its October
meeting spurred concerns about the impact of such a move.
 
    Mexico's peso  weakened more than 0.5 percent
to 12.78 per dollar after dovish central bank minutes released
Friday showed board members were divided over a surprise cut
delivered early this month to spur growth. 
    But analysts stuck to bets that the bank could cut rates
again, after growth contracted in the second quarter and heavy
rains caused massive flooding across Mexico, raising the specter
of weak growth in the third quarter. 

  Key Latin American currencies at 1559 GMT:  

 Currencies                       daily %    YTD %
                                   change   change
                                           
                          Latest           
 Brazil real              2.2035    -0.16    -7.42
                                           
 Mexico peso             12.7800    -0.55     0.66
                                           
 Chile peso             502.1000     0.18    -4.66
                                           
 Colombia peso          1888.500    -0.29    -6.49
                               0           
 Peru sol                 2.7350    -0.07    -6.73
                                           
 Argentina peso           5.7575     0.00   -14.68
 (interbank)                               
                                           
 Argentina peso           9.3600     0.00   -27.56
 (parallel)                                
                                           
 
 (Reporting by Marilia Carrera in Sao Paolo, Writing by
Alexandra Alper in Mexico City; Editing by Bernadette Baum and 
Kenneth Barry)
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