* Finance ministry official says real is still overvalued
* Region's currencies to end week down on China fears
* Mexico peso off 0.1 pct, real strengthens 0.19 pct
By Caroline Stauffer
RIO DE JANEIRO, March 23 Latin American
currencies traded mixed on Friday, with Brazil's real stronger
after robust retail sales although the government's commitment
to intervention in the local market is likely to limit future
Latin America's currencies are poised to end the week losing
ground from Monday after a series of disappointing reports from
China cast doubt on the Asian giant's future appetite for Latin
America's raw materials, possibly slowing regional growth.
But the Brazilian real bid 0.19 percent stronger from
its Thursday close at 1.8173 on Friday.
Local data showed retail sales in Brazil rose more than
expected in January, pointing to a recovery in the business
cycle this year after growth in the region's largest economy
fizzled at the end of 2011.
"We saw strong figures in retail sales, that helped the
currency a bit," said Mauricio Rosal, chief economist at Raymond
James & Associates in Sao Paulo.
Strong consumption makes some economists fear a new struggle
with inflation is in Brazil's future. Central Bank President
Alexandre Tombini eased those concerns on Friday, saying
consumer prices are expected to slow to the central bank's
target by the end of the year
"I think the focus on growth makes people nervous about
inflation, but they aren't selling Brazil assets
indiscriminately, said Win Thin, currency strategist at Brown
Brothers Harriman in New York.
Another key Brazil concern for investors is the government's
renewed commitment to intervening in the currency market.
Finance Minister Guido Mantega said on Thursday intervention
would continue and the finance ministry's No. 2 official said on
Friday the currency remains overvalued.
The real has weakened 5.5 percent since the central bank
waded back into the spot market in February. The government,
aiming to become a global power, is committed to protecting
nascent industries that are made less competitive by a strong
real in what it calls a global "currency war."
"The authorities appear to have had more success in
weakening the real this time around," London-based Capital
Economics Economist Neil Shearing wrote in a research note to
clients. "This may be because investors perceive there is now a
greater political will to prevent excessive appreciation."
Mexico's peso weakened after data from its top trading
partner, the United States, showed a decline in new U.S.
single-family home sales.
The peso, the region's only fully convertible currency, was
trading 0.1 percent weaker at 12.8348 per dollar after losing as
much as 0.4 percent after the U.S. data.
"The Mexican peso is a high beta currency, in the longer
term it will outperform but in the near term, given growth
concerns it may get pushed around a bit," said Thin of Brown
"This is pretty minor data and the U.S. is generally seen as
doing OK - the changing outlook is very much the China story,"
Chile's peso continued to weaken on Friday after closing at
a two-week low in the previous session. The peso was
off 0.12 percent at 489.3 per dollar.