June 14, 2018 / 4:34 PM / 4 months ago

EMERGING MARKETS-LatAm currencies seesaw after ECB prepares to end stimulus

    By Bruno Federowski and Claudia Violante
    BRASILIA, June 14 (Reuters) - Latin American currencies
seesawed on Thursday after the European Central Bank announced
it will end its bond purchasing scheme by year-end, removing a
key source of liquidity from global markets.
    The announcement, which makes the ECB the latest central
bank in developed economies to take steps to move away from
stimulus measures introduced to recover from the global
financial crisis, weighed on demand for emerging market assets.

    Yet the ECB's assurance that any interest rate hike is still
distant prevented any major selling off.
    Currencies from Mexico, Chile and Colombia
 dipped between 0.1 percent and 0.4 percent. The Brazilian
real, however, firmed 0.3 percent, supported by the
central bank's reinforced intervention.
    The bank has increased sales of traditional currency swaps,
which function like future dollar sales, after concerns over a
widening fiscal deficit and accelerating inflation in the United
States as well as Brazilian presidential elections later this
year drove a currency selloff.
    Analysts told Reuters that the central bank is unlikely to
keep the increased intervention past Friday.
    "The bank has to save ammunition for the elections,"
H.Commcor brokerage trader Cleber Alessie said.
    
    Key Latin American stock indexes and currencies at 1610 GMT:
 Stock indexes                   Latest        Daily   YTD pct
                                                 pct    change
                                              change  
 MSCI Emerging Markets             1,125.98    -0.85     -1.97
                                                      
 MSCI LatAm                        2,494.43     0.08    -11.87
 Brazil Bovespa                   72,068.24    -0.07     -5.67
 Mexico IPC                       47,068.17     0.66     -4.63
 Chile IPSA                        5,532.96    -0.02     -0.57
 Chile IGPA                       27,941.22    -0.01     -0.14
 Argentina MerVal                 30,486.13     0.85      1.40
 Colombia IGBC                    12,314.19     0.11      8.30
                                                              
 Currencies                          Latest    Daily   YTD pct
                                                 pct    change
                                              change  
 Brazil real                         3.7017     0.31    -10.49
 Mexico peso                        20.6775    -0.18     -4.73
 Chile peso                           634.5    -0.36     -3.13
 Colombia peso                      2,860.5    -0.10      4.25
 Peru sol                             3.264     0.25     -0.83
 Argentina peso (interbank)         27.1700    -2.83    -31.54
                                                      
 Argentina peso (parallel)             27.2    -2.21    -29.30
                                                      
 
 (Reporting by Bruno Federowski and Claudia Violente; editing by
G Crosse)
  
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