December 19, 2018 / 1:35 PM / a month ago

EMERGING MARKETS-Latam currencies steady ahead of Fed meet;Brazil stocks rise

    By Agamoni Ghosh
    Dec 19 (Reuters) - Latin American currencies steadied on
Wednesday as the dollar slumped ahead of a highly anticipated
U.S. Federal Reserve meeting, while stocks in Brazil rose in
line with most emerging market peers. 
    The dollar slid 0.3 percent ahead of the Fed meeting where a
hike in borrowing costs in the United States is widely expected
with investors betting the central bank will signal a more
cautious outlook to its path for raising interest rates in 2019.
    "A dovish hike could be something of a non-event for a
market which expects it," Kit Juckes, global head of FX
strategy, Societe Generale, said in a note. 
    "But there's a very good chance that they will reduce the
number of hikes in 2019 ... and signal the approach of the end
of the rate-hiking cycle," he said. 
    Brazil's real climbed 0.2 percent while stocks on the
Bovespa index rose 0.7 percent in a broad-based rally
led by shares of financial and material firms.
    Brazil planemaker Embraer was one of the top
gainers on the index after the company formalized a previously
announced order of 21 planes from Azul and signed a $243 million
order with the government of Kiribati.
    State controlled oil-firm Petroleo Brasileiro was
marginally lower as oil prices steadied but remained under
pressure from oversupply.
    The Mexican peso was marginally stronger a day ahead
of the central bank's decision to take a call on interest rates.
    "Inflation uncertainty remains high, which keeps the market
pricing positioned for a hawkish Banxico," said Sacha Tihanyi,
Deputy Head of Emerging Markets Strategy, TD Securities in a
note. 
    The Banco de Mexico (Banxico) is expected to raise its key
interest rate by 25 basis points to 8.25 percent, its highest
level since August 2008, a Reuters poll found. 
 
    Key Latin American stock indexes and currencies at 1320 GMT 
    
 Stock indexes                             daily %     YTD %
                               Latest       change    change
 MSCI Emerging Markets            968.24      0.55    -16.87
                                                    
 MSCI LatAm                      2531.53      0.35     -10.8
                                                    
 Brazil Bovespa                 87241.38      0.73     14.19
                                                    
 Mexico IPC                            -         -         -
                                                    
 Chile IPSA                      5117.60      0.01      0.02
                                                    
 Argentina MerVal                      -         -         -
                                                    
 Colombia IGBC                         -         -         -
                                                    
                                                            
 Currencies                                daily %     YTD %
                                            change    change
                                  Latest            
 Brazil real                      3.9019      0.23    -15.08
                                                    
 Mexico peso                     20.0623      0.05     -1.81
                                                    
 Chile peso                        688.8      0.15    -10.77
                                                    
 Colombia peso                         -         -         -
 Peru sol                              -         -         -
                                                    
 Argentina peso (interbank)            -         -         -
                                                    
 

 (Reporting by Agamoni Ghosh in Bengaluru; Editing by Bill
Trott)
  
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