June 20, 2019 / 2:45 PM / in a month

EMERGING MARKETS-Latam currencies, stocks rally as Fed lifts rate cut hopes

    June 20 (Reuters) - Most Latin American currencies firmed on
Thursday as the U.S. dollar remained on the backfoot after the
Federal Reserve boosted bets of an interest rate cut as early as
next month.
    Emerging market assets rallied, with the MSCI's index of
Latin American stocks gaining 1.3% and the
region's currencies index rising over 1%.
    However, trading volumes were thin as markets in Brazil,
which have a big impact on the indexes, and Argentina were
closed for Corpus Christi day.
    Boosting appetite for risky assets, the Fed on Wednesday
signaled interest rate cuts this year, saying it is ready to
battle growing global and domestic economic risks as it took
stock of rising trade tensions and growing concerns about weak
inflation.
    Mexico's peso touched over a seven-week high against
the dollar, while the country's main IPC stock index
jumped, led by a 2.6% gain for airport operator Grupo
Aeroportuario del Pacifico.
    Mexico on Wednesday became the first country to ratify the
United States-Mexico-Canada Agreement (USMCA) agreed late last
year to replace the North American Free Trade Agreement (NAFTA)
at the behest of U.S. President Donald Trump.
    However, analysts pointed to caution about reaching an
agreement with the United States.
    "The agreement's main hurdle is still in the U.S., where it
is unlikely the Democrat-controlled House of Representatives
will approve it this year (a 35% probability)," analysts at
Eurasia Group wrote in a note.
    "As the U.S. presidential elections ramp up and the tensions
between Democrats and the White House increase, it will become
more difficult for the USMCA to be approved."
    Chile's peso gained over 1%, tracking a gain in the
price of copper, the country's top export.
    Colombia's peso firmed more than 1%, while local
stocks posted similar gains, with energy firm Ecopetrol
SA riding on the back of higher lower oil prices
.
    
    Key Latin American stock indexes and currencies at 1425 GMT
    
 Stock indexes                       daily %
                            Latest    change
 MSCI Emerging Markets      1055.82     1.69
                                     
 MSCI LatAm                 2840.27      1.3
                                     
 Brazil Bovespa                   -        -
                                     
 Mexico IPC                43845.70     1.08
                                     
 Chile IPSA                 5044.43     0.18
                                     
 Argentina MerVal                 -        -
                                     
 Colombia IGBC             12678.55     1.13
                                     
                                            
 Currencies                          daily %
                                      change
                             Latest  
 Brazil real                      -        -
                                     
 Mexico peso                18.9680     0.26
                                     
 Chile peso                   683.6     1.26
                                     
 Colombia peso               3204.1     1.07
                                     
 Peru sol                     3.312     0.51
                                     
 Argentina peso                   -        -
 (interbank)                         
                                     
 

 (Reporting by Sruthi Shankar, additional reporting by Aaron
Saldanha in Bengaluru
Editing by Marguerita Choy)
  
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