December 17, 2019 / 2:50 PM / a month ago

EMERGING MARKETS-Chilean peso firms as copper prices scale seven-month highs

    * Latam stocks, currencies rise as sentiment stays positive
    * Chile's peso climbs for fifth straight day
    * Brazil real slips after rising in the previous session
    * Brazil equities track oil prices higher

    By Sagarika Jaisinghani and Shreyashi Sanyal
    Dec 17 (Reuters) - The Chilean peso led Latin American
currencies higher on Tuesday, tracking a rise in copper prices,
while stocks in the region kept up a 15-day winning streak on a
broader improvement in global sentiment after a U.S.-China trade
deal.
    Chile's peso firmed 0.6% in its fifth straight day of
gains as copper prices hit a seven-month high on potential
shortages next year due to production problems. The Latin
American country is the biggest exporter of the industrial
metal.
    "Historically, the relationship between the Chilean peso and
copper prices has been very, very strong," said Christian
Lawrence, senior market strategist, Latam FX at Rabobank.
    "We did see that relationship break down a few months ago,
but that does not seem to be the case today. We are also seeing
certain political pressures starting to ease slightly in Chile."
    The currency was battered earlier in the quarter by violent
protests that led to more than 25,000 people being detained. It
found some support last month after the government intervened
with a stimulus program, but is still off about 6% from Oct. 21.
    A basket of Latin American currencies was up
about 0.1%, on course to log its eighth straight session of
gains. Its counterpart tracking stocks was up
0.2%, led higher by Brazilian equities, which followed
oil prices higher.
    Investor appetite for riskier assets has improved after two
main hurdles to economic growth were lifted last week:
escalating U.S.-China trade tensions and concerns about
Britain's departure from the European Union.
    Global stocks scaled record highs on Monday after British
Prime Minister Boris Johnson's landslide victory was perceived
as paving the way for a smoother Brexit, but pulled back on
Tuesday after his willingness to take a hard line on negotiating
the future trade relationship raised fears of a hard exit.

    Market participants were also looking for more details about
the Sino-U.S. trade pact announced on Friday. The deal, which
suspended tariffs due to take effect on Dec. 15, is yet to be
formally signed by the two sides.
    The Brazilian real eased against a firmer dollar
after surging in the previous session, while the Colombian peso
 rose about 0.3%.
    The Mexican peso was flat ahead of a central bank
policy decision on Thursday, where it is expected to lower its
key interest rate again as the economy stagnates, according to a
Reuters poll.
    
    Key Latin American stock indexes and currencies at 1430 GMT:
        
     Stock indexes              Latest     Daily % change
 MSCI Emerging Markets           1102.20              1.31
                                          
 MSCI LatAm                      2849.83              0.23
                                          
 Brazil Bovespa                112070.54              0.16
                                          
 Mexico IPC                            -                 -
                                          
 Chile SPIPSA                    4835.21             -0.84
                                          
 Argentina MerVal               36842.72            -2.066
                                          
 Colombia Colcap                 1626.62             -0.33
                                          
                                                          
        Currencies              Latest     Daily % change
 Brazil real                      4.0681             -0.18
                                          
 Mexico peso                     18.9220              0.02
                                          
 Chile peso                       757.65              0.44
                                          
 Colombia peso                   3343.54              0.16
 Peru sol                         3.3488              0.07
                                          
 Argentina peso (interbank)      59.8150              0.01
                                          
 
 (Reporting by Sagarika Jaisinghani in Bengaluru; Editing by
Alex Richardson)
  
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