November 26, 2019 / 3:12 PM / 10 days ago

EMERGING MARKETS-Brazil's real slumps to record low; other Latam assets muted

    * Brazil Economy Minister relaxed about real's fall
    * Latin American currencies ease against a firmer dollar
    * U.S.-China officials hold phone call, discuss core issues
    * Argentina September GDP proxy figures eyed

    By Shreyashi   Sanyal
    Nov 26 (Reuters) - The Brazilian real fell to a record low
on Tuesday, a day after figures showed a widening current
account deficit in Latin America's biggest economy, while other
assets in the region were subdued as investors looked for fresh
signs of progress in U.S.-China trade talks.
    The real slid lower than the level hit in 2015, when
Brazil was mired in one of the deepest recessions in its
history. The currency has also been battered this month after a
failed oil auction.
    Speaking to reporters in the United States, Economy Minister
Paulo Guedes said he wasn't concerned about the exchange rate
and that a weakening exchange rate was a natural consequence of
falling interest rates.
    "The real will probably continue to lose its yield support,
which puts it at a disadvantage in strong-dollar environments,"
said Sacha Tihanyi, deputy head of emerging markets strategy at
TD Securities.
    In an effort to limit losses for the currency, the Brazilian
central bank said on Tuesday it would sell dollars in the spot
currency market.
    The wider MSCI index of Latin American FX
eased 0.5% as the dollar gained slightly on lingering optimism
about a Sino-U.S. trade truce. It had earlier jumped to a
two-week high against the safe-haven Japanese yen.
    China said on Tuesday top trade negotiators from both
countries had reached a consensus on "resolving relevant
problems," but indicated no timeline for signing a deal.

    Major central banks in Latin America have steadily lowered
borrowing costs to help economies in the region combat sluggish
growth as the trade pact between the world's two biggest
economies remains elusive. 
    The Mexican peso edged 0.1% lower on Tuesday, a day
after revised data from the national statistics agency showed
the economy entered a slight recession in the first two quarters
of this year. 
    Colombia's peso eased 0.9%, as largely peaceful
anti-government protests were expected to continue into Tuesday.
    Investors are now awaiting GDP proxy figures for September
in Argentina, after its hard-hit economy managed to edge out of
a recession in the second quarter.
     
    Key Latin American stock indexes and currencies at 1500 GMT:
   
      Stock indexes                Latest    Daily % change
 MSCI Emerging Markets              1047.16             -0.6
                                             
 MSCI LatAm                         2639.73            -1.78
 Brazil Bovespa                   106990.03            -1.32
 Mexico IPC                        43271.14            -0.61
 Chile SPIPSA                       4607.53            -0.95
                                             
 Argentina MerVal                  33069.41            -1.27
 Colombia Colcap                    1593.24            -0.47
                                             
                                                            
          Currencies               Latest    Daily % change
 Brazil real                         4.2536            -0.93
                                             
 Mexico peso                        19.4690            -0.16
                                             
 Chile peso                          792.82            -0.19
 Colombia peso                      3462.64            -0.88
 Peru sol                            3.3788             0.21
                                             
 Argentina peso (interbank)         59.7000             0.03
                                             
 
 (Reporting by Shreyashi Sanyal in Bengaluru; editing by
Jonathan Oatis)
  
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