November 27, 2012 / 5:01 PM / in 5 years

EMERGING MARKETS-Latin American currencies firm on Greece deal

3 Min Read

* Analysts speculate on new trading range for Brazil real
    * Mexican peso stumbles at 50-day moving average
    * Brazil real firms 0.3 pct, Mexico peso up 0.33 pct

    MEXICO CITY, Nov 27 (Reuters) - Latin American currencies
moved higher on Tuesday after an international deal to keep
debt-laden Greece afloat lifted demand for riskier assets around
the world.
    The Brazilian real bid 0.3 percent stronger at 2.0755
 per dollar. The currency bounced back from a 3-1/2 year low
last week after the central bank intervened in the market to
halt a steep slump in the real against the dollar.
    Analysts said authorities may be leaning toward allowing for
a weaker currency to support exporters. Brazilian policymakers
have used both verbal and market intervention to keep the real
largely within a range of 2 per dollar to 2.05 since July.
    "Maybe the government intends to promote a slightly larger
band, between 2.05 and 2.15 reais, but without abrupt
movements," said Mauricio Nakahodo, an analyst the Bank of
Tokyo-Mitsubishi, who said the central bank acted on Friday due
to the magnitude of the loss, not a specific level.
    Broadly supporting demand for riskier assets, international
lenders agreed on Tuesday on a package of measures to reduce
Greek debt that paves the way for the release of urgently needed
loans to Greece. 
    Mexico's peso  gained 0.33 percent to 12.9790
per dollar as the currency struggled to break past the 13 per
dollar level.
    The peso has firmed more than 2 percent from a 2-1/2 month
low hit earlier this month, supported by optimism on fiscal
negotiations in the U.S. Congress. 
    But sentiment on the U.S. talks could easily reverse,
analysts said, as lawmakers prepared to resume budget
negotiations this week in Washington.
    The cost of dollars in pesos hit support at the 50-day
moving average around 12.96 per dollar. Traders said the peso
would need to firm past 12.95 per dollar in order for its
advance against the dollar to pick up more momentum. 
    "The tone is cautious," said Alfredo Puig, a trader at
brokerage Vector in Monterrey, Mexico, "But it still looks like
the peso could keep gaining." 

  Latin American currencies at  1600 GMT 
 Currencies                    daily  year-t
                                   %   -date
                      Latest  change       %
 Brazil real          2.0755    0.30   -9.97
 Mexico peso         12.9790    0.33    7.63
 Argentina peso*      6.4400    0.31  -26.55
 Chile peso         480.3000    0.25    8.12
 Colombia peso     1,823.400    0.02    6.31
 Peru sol             2.5870    0.04    4.25
 * Argentine peso's rate                    
 between brokerages

0 : 0
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