* Investors await news from Bernanke's speech Friday
* Mexico's peso reverses gains; Brazil real little changed
By Jeb Blount and Michael O'Boyle
RIO DE JANEIRO/MEXICO CITY Aug 25 Latin
American currencies traded mixed in seesaw movements against
the U.S. dollar on Thursday, the day before a planned address
by the head of the U.S. central bank.
Ben Bernanke, chairman of the U.S. Federal Reserve, is
scheduled to speak on Friday at the Jackson Hole Economic
Symposium, an annual gathering of world economists and central
bankers in a Rocky Mountain resort town.
Investors have been divided between those betting Bernanke
will announce new measures to jump-start the U.S. economy and
those who think he won't, causing wide swings in the region's
currencies in recent days.
Those betting on new measures expect Bernanke to announce
or signal expansion of the Fed's "quantitative easing" program
-- a stimulus program in which the Fed bought outstanding U.S.
That plan ended in June after flooding the economy with
$600 billion of cash. Bernanke outlined that program at last
year's Jackson Hole gathering.
That cash has helped Latin American currencies gain this
year as global investors borrow at near-zero rates in the U.S.
to invest at higher yields in Latin America. [ID:nN1E77N0DL]
"All eyes are on Jackson Hole. Tomorrow is the day, and
everybody is hoping Bernanke will come up with some kind of
miracle to pull the U.S. economy out of its doldrums," said
Jankiel Santos, chief economist with BES Investimentos, the Sao
Paulo unit of Portugal's Banco Espirito Santo.
"Sadly there's not much chance of that."
Brazil's real BRBY closed the day little changed from
Wednesday, paring early losses to edge 0.02 percent stronger to
1.6095 to the dollar. Earlier it had weakened as much as 0.48
Brazilian 10-year, local-currency NTN bonds BR10YT=RR
rose 1.97 to 913.62 or 91.36 percent of face value. The yield
fell 3 basis points to 11.93 percent.
The real traded in a seesaw fashion much like world stock
markets, said Rafael Dornaus, a market analyst with Hencorp
Commcor, a Sao Paulo brokerage.
"The volatility is terrible, and the markets are blowing up
or falling down even on tiny news," he said. "There is really
nothing orienting the market in any consistent way today."
Mexico's peso MXN=D2 gave up early gains to weaken in
late afternoon trading, shedding 0.18 percent to 12.5078 to the
dollar. It had gained as much as 0.93 percent.
"If you're looking for clear reasons for why things are
moving today, things that are fundamental and different, things
that have happened in the last 72 hours, I really can't give
you much," said Alberto Ramos, chief economist with Goldman
Sachs in New York.
Mexico's 10-year "bono" MX10YT=RR fell 0.32 to 103.70
percent of face value. The yield rose 5 basis points to 6.16
percent. The yield on a comparable U.S. Treasury is 2.23
The peso's declines may soon spark a rebound in Mexican
bond prices, said Deborah Ausina, a trader at Bulltick Capital
Markets in Miami.
Investors interested in Mexican bonds have been looking to
buy when the peso weakens to about 12.50 to the dollar, she
said. Late Thursday, the peso crossed through that threshold to
trade at its weakest levels since Aug. 8.
If the market is disappointed with Bernanke's speech on
Friday, she added, the peso could slump back toward the
one-year low of 12.7633 per dollar that it reached on Aug. 9,
Colombia's peso COP2=STFX weakened 0.27 percent to
1,790.90 to the dollar.
Chile's peso was little changed from Wednesday at 466.80,
Peru's sol was little changed at 2.7300 and Argentina's
official peso ARS=RASL was little changed at 4.1825.
Argentina's unofficial, or "parallel" market peso, extended
losses toward an all-time low, weakening 0.74 percent to
(Reporting by Jeb Blount in Rio de Janeiro and Michael O'Boyle
in Mexico City; Additional reporting by Jean Luis Arce in
Mexico City; Editing by Jan Paschal and Padraic Cassidy)