November 19, 2019 / 4:20 PM / 25 days ago

EMERGING MARKETS-Chile peso eases 1% as protests rage on; Latam FX slips

    * Chile unrest continues despite government concessions
    * U.S.-China trade jitters weigh on sentiment
    * Mexican peso, Argentine peso dip
    * Brazil real firms as central bank signals stable inflation

    By Sagarika Jaisinghani and Shreyashi   Sanyal
    Nov 19 (Reuters) - The Chilean peso shed more than 1% on
Tuesday amid prolonged civil unrest despite some government
concessions, while growing uncertainty about a U.S.-China trade
deal kept other Latin American currencies directionless in
subdued trading.
    Chile's currency and stocks resumed their
slide after a brief reprieve on Friday, when lawmakers agreed to
hold a referendum to replace a dictatorship-era constitution.
The peso, which had soared nearly 4% on the news, is still on
course for its worst month in more than a year.
    "People are just being cautious because we haven't seen this
kind of social unrest in Chile and it is worrisome (since) we
don't know where things are going to go from here," said
Christian Lawrence, senior market strategist, Latam FX at
Rabobank in New York.
    The Mexican peso, Argentine peso and Peruvian
sol traded lower against a flat dollar, hit by trade
jitters after a report on Monday that Beijing was pessimistic
about a deal with Washington on rolling back tariffs.
    An index of Latin American currencies dipped
more than half a percent and was on course for its worst day in
a week.     
    Brazil's real firmed slightly to 4.21 to the dollar
after hitting a record low in the previous session as the
central bank's president, Roberto Campos Neto, said inflation
was low and stable, and that the country's foreign exchange
reserves were "quite high."
    On Monday, the currency crossed a key mark at 4.20 to the
dollar, a level last breached in August, when the central bank
was prompted to intervene for the first time in over a decade. 
    The bank has since sold dollars in the spot market almost
daily to shore up the real, sparking a debate about its
intervention policy. It said on Tuesday it would sell up to $600
million through reverse currency swaps, but later canceled the
auction ahead of a market holiday on Wednesday.
    "From a purely fundamental perspective, the real is
undervalued at the moment, but the key thing is that it rose
above 4.20," said Christian Lawrence, senior market strategist,
LatAm FX at Rabobank in New York.
    Brazil's stock index was down 0.4% in subdued
trading, weighed down by financial stocks, while Mexico shares
 were up marginally after a market holiday on Monday.
       
    Key Latin American stock indexes and currencies at 1543 GMT:
    
     Stock indexes              Latest     Daily % change
 MSCI Emerging Markets           1056.59              0.42
                                          
 MSCI LatAm                      2653.91             -0.95
                                          
 Brazil Bovespa                105841.81              -0.4
                                          
 Mexico IPC                     43443.44              0.12
                                          
 Chile SPIPSA                    4758.42             -1.16
                                          
 Argentina MerVal               30905.51             -2.97
                                          
 Colombia IGBC                         -                 -
                                          
                                                          
        Currencies              Latest     Daily % change
 Brazil real                      4.2129             -0.18
                                          
 Mexico peso                     19.3662             -0.28
                                          
 Chile peso                        786.9             -1.82
                                          
 Colombia peso                   3432.39              0.19
 Peru sol                         3.3788             -0.20
                                          
 Argentina peso (interbank)      59.7000             -0.03
                                          
 

    

 (Reporting by Sagarika Jaisinghani and Shreyashi Sanyal in
Bengaluru)
  
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