EMERGING MARKETS-Latam FX hold near highs after Fed minutes

Wed May 21, 2014 6:35pm EDT

(Adds release of Fed minutes, Brazil bank ruling)
    MEXICO CITY, May 21 (Reuters) - Latin American markets were
little changed on Wednesday, with currencies holding near recent
highs, after minutes from the Federal Reserve's last meeting
backed bets of a slow withdrawal of U.S. stimulus.
    Brazil's real firmed 0.34 percent to 2.2085 per
dollar. It has been trading in a narrow range since hitting a
more than five-month high in April following a recent cycle of
interest rate hikes that boosted the real's appeal.
    Minutes from the Federal Reserve's latest policy meeting
showed some policymakers thought it was too early to confirm
stronger growth is taking hold. 
    The minutes were seen suggesting the Fed would keep interest
rates low for some time, which would support demand for
higher-yielding emerging market assets.
    Mexico's peso dipped 0.14 percent to 12.9280 per
dollar after the central bank of Latin America's No. 2 economy
cut its growth estimate for 2014 from between 3-4 percent to
between 2.3-3.3 percent after a weak start to the year.
 
    Still, the peso is trading near a five-month high that it
hit last week. 
    The MSCI Latin American stock index edged up
nearly 0.1 percent after a drop in the previous session on a
slump in Chilean stocks. MSCI's broader emerging equity index
 rose 0.2 percent to hold near 6-1/2 month highs.
    Brazil's Bovespa stock index slipped 0.31 percent as
bank shares fell after the country's second highest court issued
a ruling that laid the ground for financial firms to have to pay
lost interest to depositors dating from economic crises in the
1980s and 1990s. 
    The nation's supreme court still has to rule on
constitutional issues of the case and decide whether banks will
have to pay compensation or not. Shares in top lender Itau
Unibanco fell 2.13 percent while rival Banco Bradesco
 lost 2.54 percent. 
    A closely watched Brazilian electoral poll is due Thursday.
Recent polls showing a decline in President Dilma Rousseff's
approval rating ahead of October's election have driven big
gains in the stock market as shareholders hold out hope for a
more market-friendly administration.
    Mexican stocks were little changed, while Chilean markets
were closed for a holiday.
                                                    
 Stock indexes                 Latest     daily %   YTD % change
                                          change    
 MSCI LatAm                    3,314.65   0.09      3.56
                                                    
 Brazil Bovespa                52,203.37  -0.31     1.35
 Mexico IPC                    41,828.98  0.06      -2.10
 Chile IPSA                    3,881.35   -1.37     4.92
 Chile IGPA                    19,029.89  -1.17     4.40
 Argentina MerVal              7,261.07   0.59      34.69
 Colombia IGBC                 13,648.78  1.30      4.42
 Peru IGRA                     15,642.04  -0.22     -0.71
 Venezuela IBC                 2,188.40   -0.06     -20.03
                                                    
 Currencies                    Latest     daily %   YTD % change
                                          change    
 Brazil real                   2.2085     0.34      6.72
 Mexico peso                   12.9200    0.06      0.85
 Chile peso                    552.8000   Closed    -4.83
 Colombia peso                 1910.6000  0.57      1.12
                                                    
 Peru sol                      2.7890     0.04      0.14
 Argentina peso (interbank)    8.0600     0.03      -19.45
                                                    
 Argentina peso (parallel)     12.0500    -2.32     -17.01
                                                    
                                                    
 
 (Reporting by Michael O'Boyle; editing by Andrew Hay)