EMERGING MARKETS-Chilean peso jumps on inflation data; Bovespa falls

Thu May 8, 2014 12:33pm EDT

By Asher Levine
    SAO PAULO, May 8 (Reuters) - The Chilean peso posted
its biggest gain against the dollar in over seven months on
Thursday after higher-than-expected inflation data dampened
expectations that interest rates would be cut at the central
bank's next policy meeting. 
    Most other currencies in Latin America strengthened against
the dollar after U.S. Federal Reserve Chair Janet Yellen
signaled the Fed would continue to support the economy with
monetary stimulus. The region's stock indexes also gained,
except Brazil's Bovespa, which was weighed down by a decline in
Petrobras shares.
    Inflation in Chile rose far above market
expectations in April, data showed Thursday. The central bank,
which has cut rates 100 basis points since October in a bid to
stimulate Chile's flagging economy, meets to decide the key
interest rate next week. 
    "This print will inevitably postpone the next move from the
(central bank)," Citi analyst Dirk Willer wrote in a client
note. "They believe that higher inflation is transitory ... but
higher core and non-tradable prices should give them pause on
cutting rates too soon."
    The Colombian peso also strengthened, reaching its
highest level against the dollar in over six months, while gains
in the Mexican peso were muted by better-than-expected
inflation data on Thursday. 
    The region's stocks, as measured by the MSCI Latin American
stock index, were up about 0.5 percent. A
four-session winning streak by Brazil's Bovespa stock index
 was in danger of ending.
    Shares of state-run oil firm Petrobras, formally known as
Petroleo Brasileiro SA fell 3 percent, leading the
Bovespa to a nearly 1 percent decline. 
    Petrobras shares have gained more than 50 percent over the
past 35 days, fueled by a decline in President Dilma Rousseff's
approval rating ahead of October's election. Many minority
shareholders have complained that her administration is
mismanaging the company.
    "Today looks like profit-taking as we are also seeing other
stocks that have gained a lot on the back of Rousseff's poll
numbers falling today, like Banco do Brasil," said Ariovaldo
Santos, a trader with H.Commcor in Sao Paulo.
    
    Key Latin American stock indexes and currencies at 1604 GMT:
    
 Stock indexes                             daily %     YTD %
                               Latest       change    change
 MSCI Emerging Markets            1010.8      0.63     -4.34
                                                    
 MSCI LatAm                      3373.67      0.51      4.87
                                                    
 Brazil Bovespa                 53542.33     -0.94      3.95
                                                    
 Mexico IPC                     41966.17      0.39     -1.78
                                                    
 Chile IPSA                      3917.29      0.35      5.90
                                                    
 Chile IGPA                     19216.29      0.29      5.43
                                                    
 Argentina MerVal                6924.03      0.03     28.44
                                                    
 Colombia IGBC                  13685.79      1.06      4.70
                                                    
 Peru IGRA                      15789.18      0.72      0.23
                                                    
 Venezuela IBC                   2313.15     -0.65    -15.47
                                                    
                                                            
 Currencies                                daily %     YTD %
                                            change    change
                                  Latest            
 Brazil real                      2.2043      0.60      6.92
                                                    
 Mexico peso                     12.9439      0.19      0.67
                                                    
 Chile peso                        554.5      1.93     -5.12
                                                    
 Colombia peso                   1900.54      0.52      1.66
 Peru sol                          2.789      0.36      0.14
                                                    
 Argentina peso (interbank)       7.8775      0.06    -17.58
                                                    
 Argentina peso (parallel)         10.69      0.19     -6.45
                                                    
 

 (Reporting by Asher Levine; Editing by Jeffrey Benkoe)
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