December 2, 2019 / 3:19 PM / 5 days ago

EMERGING MARKETS-Brazil's real firms as c. bank sells dollars; shrugs off U.S. tariffs

    * Trump to restore tariffs on imports from Brazil, Argentina
    * Brazil stocks rise 1% after strong manufacturing data
    * Chilean peso firms as central bank intervention kicks in

    By Ambar Warrick
    Dec 2 (Reuters) - Brazil's real firmed on Monday as a spot
auction by the central bank supported the currency following a
tweet by U.S. President Donald Trump that said he was restoring
tariffs on metal imports from Brazil and Argentina.
    Without going into details, Trump said he would restore
tariffs on U.S. steel and aluminum imports, surprising officials
in the two South American countries and prompting them to seek
explanations.
    The real eased 0.4% immediately after the tweet, but
reversed course after the central bank sold 9,600 reverse
currency swap contracts and $480 million in spot currency.

    The Argentine peso was largely unchanged, but the
country's stock index fell about 1.7% after gaining for
three days in a row. Aluminum producer Alua Aluminio Argentino
 led declines on the index.
    "We don't know what kind of response we're going to see
(from Brazil and Argentina), but I suspect at this point it is
more of a sell-the-news situation and then investors can settle
back and interpret the data in a sober fashion," said Mark
Luschini, chief investment strategist at Janney Montgomery Scott
in Philadelphia.
    A manufacturing rebound in China spurred optimism in Latin
American markets, with the MSCI index tracking stocks in the
region rising for the fourth straight session.

    Brazilian stocks hit a near one-month high after
data showed the country's manufacturing sector grew in November,
pointing to a steady recovery in Latin America's largest
economy.
    Financials and material stocks were the biggest boosts to
the Bovespa, while electronics retailer Via Varejo SA
led gains after it flagged strong sales during the Black Friday
discount shopping event.
    Focus now turns to Brazil's third quarter economic growth
data, due Tuesday, which is likely to show an expansion of 0.4%,
according to a Reuters poll. 
    The Chilean peso firmed as the central bank's $20
billion currency intervention program kicked in. The bank had
outlined the plan last week after the peso hit a record low
against the dollar. 
    The peso was also supported by higher prices for copper,
Chile's largest export, as markets perceived increased demand
for the metal following the stronger-than-expected Chinese data.

    
    Key Latin American stock indexes and currencies at 1505 GMT:
   
     Stock indexes              Latest     Daily % change
 MSCI Emerging Markets           1038.95              -0.11
                                          
 MSCI LatAm                      2662.03               0.19
                                          
 Brazil Bovespa                108904.90               0.62
                                          
 Mexico IPC                     42731.88              -0.21
                                          
 Chile SPIPSA                    4518.24              -0.45
                                          
 Argentina MerVal               33868.37             -1.831
                                          
 Colombia Colcap                 1601.31              -0.66
                                          
                                                           
        Currencies              Latest     Daily % change
 Brazil real                      4.2280               0.25
                                          
 Mexico peso                     19.5737              -0.06
                                          
 Chile peso                        806.2              -0.30
                                          
 Colombia peso                   3522.56              -0.20
 Peru sol                         3.4048               0.01
                                          
 Argentina peso (interbank)      59.9500              -0.02
                                          
 

 (Reporting by Ambar Warrick in Bengaluru; Additional reporting
by Sruthi Shankar
Editing by Alistair Bell)
  
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