December 7, 2018 / 9:49 PM / 5 days ago

EMERGING MARKETS-LatAm FX rises vs dollar, stocks drag on Wall Street tumble

 (Recasts throughout, updates prices)
    By Susan Mathew
    Dec 7 (Reuters) - Most Latin American currencies firmed on
Friday as the dollar weakened, while stock markets tracked Wall
Street's move lower on a spike in U.S.-China trade tensions.
    Disappointing jobs data from the United States fueled the
view that U.S. growth is moderating and the Federal Reserve may
end its rate hike cycle sooner than expected, denting the
dollar.
    "The employment data adds more doubts about the strength of
the U.S. economy, undermining the advance of the dollar," said
Alfonso Esparza, an analyst at Oanda.
    The MSCI index of Latin American currencies
rose for the first time in four days, up 1.4 percent, and
climbed half a percent on the week on a broad weakness in the
dollar.
    "For emerging markets, a less restrictive (U.S.) monetary
policy is a constructive force," said Luiz Stuhlberger, a
portfolio manager at Verde Asset Management. 
    The cumulative impact of a steady rise in U.S. interest
rates has seen money flowing out of developing markets this
year.
    Mexico's currency climbed 0.3 percent with data
showing Mexico's inflation rate cooled less than expected in
November, backing expectations that the central bank will hike
rates again this month.
    The Argentine peso firmed and broke a three-week
losing run. The Colombian peso led gains in the region,
up more than 1 percent, and posted its best week since April
this year.
    Brazil's currency, the real, slipped for a fourth
straight session and posted its longest weekly losing streak
since Sept 2015. José Carlos Amado, a trader with brokerage
Spinelli, attributed the real's weakness to outflows on the back
of uncertainty overseas and low interest rates.
    A poll showed that Brazil's central bank is likely to
refrain from raising interest rates next week and hold them at
an all-time low for longer than expected as a slow and uneven
economic recovery keeps a lid on inflation.  
    Meanwhile, worries fanned by hostile comments from the White
House saying Washington would raise tariff rates on Chinese
goods if the two countries could not reach an agreement during
the 90-day negotiating period weighed on Wall Street.
    Mirroring those moves, Brazil stocks reversed gains
with a rise in energy companies on higher oil prices being
outweighed by losses in most other sectors. 
    Argentina's main stock index posted its biggest
daily drop in more than two weeks and closed 1.5 percent
lower.
    Colombian stocks edged up and clocked their biggest
weekly gain since September end, while Chile stocks
lost for a third straight week. 
    
    Key Latin American stock indexes and currencies at 2129 GMT
      Stock indexes          Latest      Daily    YTD pct
                                          pct      change
                                         change   
 MSCI Emerging Markets          981.37      0.25    -15.29
                                                  
 MSCI LatAm                   2,590.58      0.74      -8.4
                                                  
 Brazil Bovespa              88,115.07     -0.82     15.33
 Mexico IPC                  41,846.05     -0.34    -15.21
 Chile IPSA                   5,094.62     -0.52     -0.52
 Argentina MerVal            31,550.40     -1.47      4.94
 Colombia IGBC               11,853.53      0.03      4.25
                                                          
        Currencies           Latest      Daily    YTD pct
                                          pct      change
                                         change   
 Brazil real                    3.9068     -0.44    -15.19
                                                  
 Mexico peso                   20.2670      0.39     -2.80
                                                  
 Chile peso                      674.8      0.02     -8.91
                                                  
 Colombia peso                 3,145.1      1.24     -5.19
 Peru sol                        3.369      0.15     -3.92
                                                  
 Argentina peso                37.3700      1.02    -50.23
 (interbank)                                      
                                                  
 
 (Additional reporting by Miguel Angel Gutiérrez in Mexico City,
Paula Arend Laier and Claudia Violante in Sao Paulo; editing by
G Crosse)
  
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