EMERGING MARKETS-Brazil real gains as central bank rolls over swaps

Mon Oct 28, 2013 3:03pm EDT

RIO DE JANEIRO, Oct 28 (Reuters) - The Brazilian real edged
higher on Monday, bucking a weakening trend in Latin America,
supported by a central bank plan to roll over currency swaps,
derivative contracts that provide investors with protection
against a possible currency depreciation.
    Other Latin American currencies declined, however, as
investors pocketed part of a recent rally that had been fueled
by bets that the U.S. Federal Reserve will signal this week that
its stimulus plan will remain in place for longer.
    The Fed is widely seen keeping the pace of its bond-buying
program unchanged at $85 billion per month at the end of its
two-day meeting on Wednesday. Expectations that it will not
begin withdrawing that stimulus until March 2014 have boosted
investors' appetite emerging markets assets. 
    * The Brazilian real  gained 0.2 percent as the
country's central bank sold all the 20,000 currency swaps it had
offered to roll-over similar contracts expiring on Nov. 1.
    * Brazil's central bank will hold two more auctions this
week to roll over the $8.9 billion of currency swaps that expire
early next month. So far, policymakers have renewed nearly $4
billion of those contracts. 
    * The Mexican peso dropped 0.2 percent, easing
slightly after a rally that also was boosted by a central bank
statement on Friday signaling no more interest rate cuts are in
the pipeline. 
    * The Chilean peso ended 0.3 percent weaker at a
seven-week low of 507.00 per dollar, crossing its 100-day simple
moving average of 505.05 per dollar.

    Latin America FX prices at 1803 GMT: 
    
 Currencies                            daily %    YTD %
                                        change   change
                               Latest           
 Brazil real                   2.1832     0.22    -6.56
                                                
 Mexico peso                  12.9015    -0.17    -0.29
                                                
 Chile peso                  507.0000    -0.30    -5.58
                                                
 Colombia peso              1884.0500    -0.08    -6.27
                                                
 Peru sol                      2.7540     0.18    -7.37
                                                
 Argentina peso                5.8900    -0.08   -16.60

 Argentina peso                9.8900     2.12   -31.45
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