July 30, 2019 / 2:24 PM / 4 months ago

EMERGING MARKETS-Latam FX slip ahead of U.S, Brazil rate decisions

    July 30 (Reuters) - Latin American currencies slipped on
Tuesday as investors awaited the conclusion of a U.S. Federal
Reserve policy meeting for clues on the direction of interest
rates, while Brazilian shares were hit by declines in banking
stocks.
    The real edged lower for a second day ahead of
Brazil's central bank decision on Wednesday. A Reuters poll of
27 economists showed the median forecast was for an interest
rate cut of 25 basis points to 6.25%.
    Brazil is the latest among a series of developing world
economies to cut rates to combat a slowdown in growth, spurred
by trade disputes. However, the focal point for markets is
whether the Fed will signal if its widely expected
25-basis-point rate cut is the start of a new easing cycle.
    "With cross-currents persisting and inflation remaining
subdued, we look for the Fed to leave the door open to further
easing but to avoid pre-committing to further cuts," TD
Securities macro strategist Oscar Munoz said in a note.
    Shares of Brazil's largest lender, Itau Unibanco Holding 
 fell about 3% as it expects its loan book to grow
close to the bottom of its target range in 2019 and announced
cost cuts amid rising competition.
    Other banks such as Banco Bradesco and Banco do
Brasil fell about 1%.
    Mexico's peso held steady. President Andres Manuel
Lopez Obrador told Bloomberg in an interview on Monday that it
was important to lower interest rates to encourage economic
growth while reiterating that he respected the autonomy of the
central bank.
    
    Key Latin American stock indexes and currencies at 1343 GMT:
    
   Stock indexes           Latest    Daily %
                                     change
 MSCI Emerging Markets      1043.08    -0.25
                                     
 MSCI LatAm                 2854.93     -0.7
                                     
 Brazil Bovespa           102839.31    -0.62
                                     
 Mexico IPC                       -        -
                                     
 Chile IPSA                       -        -
                                     
 Argentina MerVal                 -        -
                                     
 Colombia IGBC                    -        -
                                     
                                            
      Currencies           Latest    Daily %
                                     change
 Brazil real                 3.7915    -0.23
                                     
 Mexico peso                19.0681    -0.08
                                     
 Chile peso                     699    -0.41
                                     
 Colombia peso              3297.27    -0.53
                                     
 Peru sol                         -        -
                                     
 Argentina peso             43.9000    -0.14
 (interbank)                         
                                     
 

 (Reporting by Sruthi Shankar in Bengaluru; Editing by
Bernadette Baum)
  
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