July 23, 2019 / 2:59 PM / a month ago

EMERGING MARKETS-Dollar strength pressures Latam FX; IMF trims growth outlook

    July 23 (Reuters) - A strong U.S. dollar and sliding oil
prices dragged on Latin American currencies on Tuesday, while
stocks were mixed amid expectations central banks around the
world would cut interest rates soon.
    An index of Latin American currencies
dropped 0.6%, with Brazil's real falling nearly 0.8%,
partly pressured by a slide in oil prices.
    Brazil's consumer price index rose 0.09% in the month to
mid-July, but missed market expectations, reaffirming concerns 
about the sluggish growth rate of Latin America's largest
economy. 
    Economists at Bank of America Merril Lynch lowered their
outlook for Brazilian interest rates, predicting that the
central bank will undertake an aggressive policy-easing cycle
starting next week's monetary policy meeting.   
    Adding to the dour mood, the IMF slashed its economic growth
expectation for Latin America by more than half compared with
estimates from just three months ago, citing its downgrades to
growth in both Brazil and Mexico.
    Mexico's peso was down 0.4%, with President Andres
Manuel Lopez Obrador criticizing the IMF's downgrade and
reiterating that the economy will expand 2% in 2019.
    The Chilean and Colombian peso fell between
0.3% and 0.5%.
    Argentina's peso shed 0.8%. The IMF in its report
expected a slightly deeper-than-expected recession in Argentina
in 2019 and a slower recovery in 2020.
    Earlier this month, ratings agency Moody's had changed its 
economy's outlook to negative from stable for Argentina, citing
rising uncertainty about economic policy and risk of additional
"damaging currency shocks."             
    Stock indices were mixed in the region, with Brazil's
Bovespa falling marginally as losses in material stocks
weighed on the index, but stocks in Argentina rose 0.9%.
   
  Key Latin American stock indexes and currencies at 14:45 GMT
  
 Stock indexes                                   daily %
                            Latest                change
 MSCI Emerging Markets             1054.20          0.04
                                            
 MSCI LatAm                        2891.44         -0.73
                                            
 Brazil Bovespa                  103707.69         -0.23
                                            
 Mexico IPC                       41122.94         -0.21
                                            
 Chile IPSA                        5031.76          0.11
                                            
 Argentina MerVal                 39093.00          0.94
                                            
 Colombia IGBC                    12922.09         -0.19
                                            
                                                        
 Currencies                                      daily %
                                    Latest        change
 Brazil real                        3.7657         -0.75
                                            
 Mexico peso                       19.1378         -0.45
                                            
 Chile peso                          691.7         -0.45
                                            
 Colombia peso                     3183.53         -0.24
 Peru sol                            3.291         -0.18
                                            
 Argentina peso                    42.6450         -0.43
 (interbank)                                
                                            
 
    
 (Reporting by Agamoni Ghosh in Bengaluru; Additional reporting
by Rodrigo Campos; Editing by Bernadette Baum)
  
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