October 15, 2018 / 4:21 PM / a month ago

EMERGING MARKETS-Brazil's real, Mexican peso firm as dollar weakens

    By Susan Mathew
    Oct 15 (Reuters) - The Brazilian real and Mexico's peso
firmed on Monday as the dollar slipped on mounting geopolitical
concerns in a week when investors will watch central bank
minutes and earnings.
    The dollar dipped after U.S. retail sales data for September
missed expectations. The dollar and global stock markets were
also pressured by tensions between Saudi Arabia and the West,
along with concerns such as the U.S.-China trade war and rising
oil prices.
    The Mexican peso strengthened for a third straight
day ahead of minutes of the central bank's October meeting
expected on Thursday. 
    However, "volatility is expected to continue in the short
term" for Mexico's peso "as investors adjust their portfolios to
incorporate a picture of higher yields of U.S. bonds, in a stock
market with relatively high valuations," analysts at Santander
said in a note.
    The country's stock market climbed back from an early
decline as the Dow Jones Industrial index and the S&P 500
 bounced off session lows.
    Brazil's real rose more than 1 percent, resuming
trading after a three-day weekend. The currency has gained
nearly 9 percent so far this month, second only to the Argentine
peso. The real has been boosted by growing investor
hopes that market-preferred presidential candidate Jair
Bolsonaro will win the election.
    Brazil central bank President Ilan Goldfajn said late on
Thursday that the country was well positioned to withstand
shocks to its economy, and reiterated that basic interest rates
will be raised only if there is a worsening balance of risks and
inflation expectations.
    The stock market rose after two losing sessions,
with gains driven by a 2.4 percent rise in iron ore miner Vale
 as its third-quarter production reached an all-time
high.
    Gains however, were capped by a 33 percent plunge in shares
of Smiles Fidelidade SA a loyalty program of airliner
Gol Linhas Aéreas Inteligentes, after Gol said it
plans to buy out minority shareholders in Smiles via a share
swap whose terms will be determined by an independent committee.

    Other markets in Latin American were closed for local
holidays. 
    Key Latin American stock indexes and currencies at 1548 GMT:
 Stock indexes                            Daily %     YTD %
                                           change    change
                                Latest             
 MSCI Emerging Markets            980.09     2.66     -15.4
                                                   
 MSCI LatAm                      2659.44    -0.26     -5.97
 Brazil Bovespa                 83979.97     1.28      9.92
 Mexico IPC                     47496.43     0.11     -3.76
                                                           
 Currencies                     Latest    Daily %  YTD %
                                          change   change
 Brazil real                    3.7231    1.47     -11.01
 Mexico peso                    18.8148   0.20     4.70
 
 (Reporting by Susan Mathew in Bengaluru; Editing by David
Gregorio)
  
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