* China slows, trimming outlook for commodity demand
* Greece, Portugal debt woes add to dollar strength
* Dollar flows may limit real's declines ahead.
* Colombia peso, Brazil real lead declines.
By Jeb Blount
RIO DE JANEIRO, May 11 Latin American
currencies weakened against the U.S. dollar on Wednesday on
concerns that China's economy is cooling, a development that
could limit demand for Latin American commodities exports.
Colombia's peso COP= weakened 1.41 percent to 1,811.10.
Brazil's real BRBY weakened 0.93 percent to bid at 1.618 to
the U.S. dollar. Mexico's peso MXN= shed 0.89 percent to
11.6530 per dollar, its worst one-day loss since mid-March.
The declines came after China's government said industrial
output rose 13.4 percent in April compared with a year earlier,
more than a percentage point below expectations. Inflation in
China eased to 5.3 percent in April from a 32-month high in
"There is a perception worldwide that Chinese growth is
easing, and with that we are seeing a clear impact not only on
the prices of major Latin American commodities but on the
region's currencies as well," said Flavio Serrano, senior
economist with Portugal's Espirito Santo Investment Bank in Sao
Copper fell 3 percent to $8,700 a tonne. Soybeans fell 0.58
percent to $13.295 a bushel. Coffee slid 3.34 percent to
$273.95 a lb. Iron-ore, the main steel ingredient, has slipped
2.1 percent since May 4.
Chile, the world's largest copper producer, gets more than
a third of its export earnings from the metal. Brazil and
Colombia are leading coffee producers. Brazil is the
second-largest exporter of soybeans and iron-ore.
The Chilean peso CLP= fell 0.75 percent to 468, while the
Mexican currency MXN=MXN=D2 was 0.79 percent weaker at
GREECE, PORTUGAL CONCERN
In Mexico, traders said the risk of a debt default in
Greece and Portugal may reduce appetite for investments in
emerging markets, preventing the Mexican peso from
strengthening beyond a 2-1/2 year high of 11.4815 seen early
"Getting to 11.40 or 11.30 could be more difficult ... due
to the situation in Greece and the euro zone," said Antonio
Magana, head of currency trading at brokerage Interacciones in
Brazil's real may be in for a period of back-and-forth
trading, said Joao Ferreira, managing partner at Futura
Corretora, a Sao Paulo currency brokerage.
Returns from a growing consumer market in Brazil, the
world's eighth-largest economy, continue to be promising even
in the face of today's commodities downturn, he said.
"Brazil is clearly following the world down today, but I
don't see much chance of the real slipping beyond 1.65 to the
dollar," he said. "Much of what you see today is covering of
short positions in the dollar not a bet on the long-term health
of the Brazilian economy."
A shortage of dollars in the market caused by a 6 percent
tax on all loans of up to two years, has eased, Ferreira said.
The rate on Brazil's coupon cambial, a proxy for
dollar-indexed interest rates in the country, has fallen to
4.75 percent after reaching a high of 7.5 percent on April 27.
(Additional reporting by Michael O'Boyle; Editing by Kenneth