June 27, 2018 / 10:13 PM / in 25 days

EMERGING MARKETS-Latam currencies ease on lingering trade concerns

 (Updates prices, adds Argentina's MerVal stock index losses)
    By Bruno Federowski
    BRASILIA, June 27 (Reuters) - Latin American currencies
weakened on Wednesday as concerns over escalating U.S.-China
trade tensions kept a lid on demand for riskier assets.
    Worries that a full-blown trade war will break out between
Beijing and Washington continued to weigh on currencies and sent
Chinese stocks hurtling lower.
    That also pressured emerging market currencies, which
typically suffer at times of risk aversion. The Argentine peso
 slipped 1.39 percent, while the Mexican peso
was down 1.07 percent.
    The Brazilian real continued to underperform, leading
the region's currency losses with a 2.01 percent decline.    
    Concerns over unpredictable presidential elections in
October, as well as the government's fiscal outlook have
battered the Brazilian currency, the second-worst performing
currency in Latin America this year behind only the Argentine
peso.
    A decision by a Supreme Court Justice ruling that all
privatizations must be approved by Congress also weighed on the
currency.
    "The market does not enjoy that kind of political
interference, it tends to curb dollar inflows," Mirae Asset head
of operations Pablo Spyer said.
    Brazil's benchmark Bovespa stock index slid 1.11
percent, reversing gains from earlier in the session. 
    In Argentina, the MerVal stock index closed down 8.8
percent on Wednesday, its worst daily performance since early
2014, as concerns about global trade tensions weighed on the
market.
    The MerVal touched its lowest level since November 2017 and
has erased gains from last week, when stocks rose on MSCI's
announcement that it would upgrade Argentina to its emerging
markets category, from frontier markets previously.
            
    Key Latin American stock indexes and currencies at 2106 GMT:
    
 Stock indexes                 Latest   Daily pct   YTD pct
                                           change    change
 MSCI Emerging Markets        1,052.12      -1.46     -9.18
                                                   
 MSCI LatAm                   2,413.21      -1.92    -14.67
 Brazil Bovespa              70,609.00      -1.11     -7.58
 Mexico IPC                  46,874.43      -0.07     -5.02
 Chile IPSA                   5,276.44      -0.31     -5.18
 Chile IGPA                  26,796.47      -0.24     -4.23
 Argentina MerVal            25,921.08      -8.96    -13.78
 Colombia IGBC               12,250.50       0.86      7.74
 Venezuela IBC               83,806.20       7.28    164.33
                                                           
 Currencies                     Latest  Daily pct   YTD pct
                                           change    change
 Brazil real                    3.8739      -2.01    -14.47
 Mexico peso                    20.171      -1.07    -2.342
 Chile peso                      645.5      -0.74     -4.78
 Colombia peso                2,944.55      -0.51      1.27
 Peru sol                        3.273      -0.18     -1.10
 Argentina peso (interbank)    27.4300      -1.39    -32.19
                                                   
 Argentina peso (parallel)        27.9       0.00    -31.08
                                                   
 
 (Reporting by Bruno Federowski; Editing by Richard Chang)
  
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