RIO DE JANEIRO Aug 20 Latin American currencies
halted a prolonged selloff on Tuesday as U.S. Treasury debt
yields dropped for the first time in more than a week, bringing
at least temporary relief to investors worried about an expected
withdrawal of U.S. stimulus measures.
Major regional currencies, such as the Mexican peso
and the Brazilian real , posted gains for the first
time in at least seven sessions as U.S. benchmark 10-year
Treasury note yields dropped to 2.82 percent from Monday's close
of 2.88 percent.
Investors had been dumping emerging market currencies in the
past few days as expectations that the U.S. Federal Reserve will
cut back on its bond-buying program have sent Treasury yields
soaring to two-year highs, reducing the allure of
higher-yielding assets globally.
Analysts said, however, that Tuesday's recovery could prove
to be temporary as investor jitters are not going away anytime
Crucial for investors' expectations about the future of U.S.
stimulus measures will be the release on Wednesday of minutes of
the Fed's latest monetary policy meeting.
* The Brazilian real ended 0.9 percent stronger after
slumping some 6 percent over six consecutive sessions of losses.
The currency was also supported by the central bank's active
intervention amid policymakers' heightened rhetoric against
* In a strategy to shore up the currency, Brazil's central
bank intervened in both the futures and spot markets, selling
traditional currency swaps and spot dollars through repurchase
* The Mexican peso rose 0.7 percent after seven straight
sessions of losses, even as data showing an unexpected economic
contraction in the second quarter disappointed economists.