July 15, 2019 / 8:21 PM / a month ago

EMERGING MARKETS-Brazil's real pauses after rally, Argentine peso hit by Moody's revision

 (Updates to close)
    By Sruthi Shankar
    July 15 (Reuters) - Most Latin American currencies weakened
on Monday, halting the Brazilian real's recent run-up as
investors looked for progress in the government's pension reform
bill, while the Argentine peso was hit hard by Moody's outlook
cut.
    The real fell about 0.5% after posting its strongest
weekly gain since late May, while Sao Paulo-listed shares
 retreated from record highs made last week after
Brazil's lower house of Congress approved the main text of the
bill.
    Leaders said a final vote on the bill may not take place
before August, as negotiations delayed the process and reduced
savings from the overhaul.
    "Our base case is despite the second floor vote being
delayed until 6 August, the reform is on track to be approved by
the Lower House by a large majority," Wilson Ferrarezi,
economist at TS Lombard, said in a note.
    A central bank indicator showed economic activity in Brazil
rose in May, the first increase this year and an indication that
the country may avoid slipping back into recession.
    The Mexican, Chilean and Colombian
pesos made tepid moves against the dollar which advanced in thin
trading. 
    The Argentine peso slumped 2% to its weakest level in
over a week after ratings agency Moody's changed the economy's
outlook to negative from stable over the weekend, citing rising
uncertainty about economic policy and risk of additional
"damaging currency shocks."
    Moody's decision comes a little more than three months
before the country's elections in which President Mauricio
Macri, seeking a second term, is being challenged by Alberto
Fernandez, who has former populist president Cristina Fernandez
de Kirchner on his ticket.
    
  Key Latin American stock indexes and currencies at 1956 GMT
    
    
 Stock indexes                       daily %
                            Latest    change
 MSCI Emerging Markets      1057.33     0.61
                                     
 MSCI LatAm                 2935.50    -0.16
                                     
 Brazil Bovespa           103717.50    -0.18
                                     
 Mexico IPC                43094.46     1.05
                                     
 Chile IPSA                 5069.95  
                                     0.03
 Argentina MerVal          41348.79    -3.28
                                     
 Colombia IGBC             13016.77    -0.12
                                     
                                            
 Currencies                          daily %
                                      change
                             Latest  
 Brazil real                 3.7560    -0.50
                                     
 Mexico peso                18.9846    -0.03
                                     
 Chile peso                   680.5    -0.15
                                     
 Colombia peso              3188.15     0.08
                                     
 Peru sol                     3.283     0.00
                                     
 Argentina peso             42.3800    -1.83
 (interbank)                         
                                     
 
    

 (Additional reporting by Agamoni Ghosh in Bengaluru; Editing by
Bill Trott and Richard Chang)
  
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