EMERGING MARKETS-Mexico peso firms as oil reform prospects brighten

Tue Dec 3, 2013 6:05pm EST

MEXICO CITY, Dec 3 (Reuters) - Mexico's peso firmed sharply
on Tuesday as lawmakers moved closer to passing a bill to open
up the oil industry to private investment and after a heart
attack suffered by a leading leftist dampened the prospects for
major street protests. 
    Mexican senators were set to approve an electoral reform
demanded by the opposition, opening the path for Congress a to
approve the energy legislation that is the key plank of
President Enrique Pena Nieto's economic reform drive.
    The leader of Pena Nieto's Institutional Revolutionary Party
(PRI) in the Senate said that lawmakers could turn to the energy
bill as soon as the political reform was approved. Senators were
expected to pass the bill later on Tuesday. 
    Further boosting the peso, Mexican leftist Andres Manuel
Lopez Obrador was hospitalized with heart trouble, reducing the
likelihood that he will be able to lead protests against Pena
Nieto's energy plans. 
    "If he is not stirring the people up, then what is the
chance the protests are very strong?" said Alberto Bernal, an
economist at brokerage Bulltick in Miami.
    The Mexican peso  gained 0.83 percent to
13.1075 per dollar.
    Meanwhile, Brazil's currency weakened and yields on the
most-liquid interest rate futures contracts dipped after data
showed Latin America's biggest economy shrank in the third
quarter for the first time since early 2009. 
    The data backed expectations that the central bank may slow
down the pace of monetary tightening. The real lost just
over 1 percent to 2.3785 per dollar, slumping to a fresh
three-month low. 
     Latin American currencies have also been hurt in recent
months by concerns that the U.S. Federal Reserve may start
winding down its bond-buying program earlier than many expect.
    Strong U.S. payroll data due on Friday could add to bets the
Fed will trim back its bond-buying program. Other Latin American
currencies also slipped on Tuesday.
    U.S. stimulus measures have fed demand for higher-yielding
emerging market assets in recent years, but much of those
investments could funnel back to the United States as interest
rates there rise.  

    Latin American currencies at 2230 GMT:
    
 Currencies                          daily %    YTD %
                                      change   change
                             Latest           
 Brazil real                 2.3785    -1.05   -14.23
                                              
 Mexico peso                13.1075     0.82    -1.86
                                              
 Chile peso                534.0000    -0.28   -10.36
                                              
 Colombia peso            1944.2000    -0.55    -9.17
                                              
 Peru sol                    2.8050    -0.07    -9.06
                                              
 Argentina peso              6.1775    -0.32   -20.48

 Argentina peso              9.2600    -0.43   -26.78
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