March 3, 2020 / 2:32 PM / a month ago

EMERGING MARKETS-Latam FX slip as as G7 statement on coronavirus disappoints

    By Susan Mathew
    March 3 (Reuters) - Latin American currencies weakened on
Tuesday after a statement from financial officials from the G7
countries failed to detail concrete measures to help economies
stabilize from damage caused by a fast-spreading coronavirus
outbreak.
    Against a stronger dollar, the currencies of Brazil
and Mexico both weakened about 0.7%, with the peso giving
back most of Monday's gains. 
    After a severe whipping last week, markets around the globe 
breathed a sigh of relief on Monday as major central bank
officials raised hopes that necessary action would be taken to
support markets as the virus spread fast and far beyond China
where it originated.
    Markets had pinned hopes on the Group of Seven outcome, but
the extended recovery on Tuesday was cut short after the G7
merely reiterated that message after a conference call with its
finance ministers and central banks governors.

    "The statement does not point to a near-term coordinated
action. Rather, it suggests individual central banks will make
their own decisions regarding the appropriate timing and size of
policy actions," said Andrew Hollenhorst, chief U.S. economist
at Citi Research.
    "This will come as a modest disappointment to risk-asset
investors who were expecting a more concerted easing effort."
    Chile's peso traded flat. It pared early gains of as
much as 0.3% lifted by a rise in its biggest export revenue
item, copper.
    Colombia's currency slipped 0.6% taking no solace
from rising oil prices. The currency had gained almost 2% last
session, posting its best day in seven months. 
    "Monetary and financial policies...cannot solve the
underlying issue - prevent the spread of the coronavirus," wrote
Thu Lan Nguyen, an analyst at Commerzbank.
    Regional stocks swung wildly, mirroring movements in U.S.
futures. 
    Brazil stocks traded flat, having swung more than
0.3% both ways. Food processor BRF SA gave up early
gains of as much as 1.2% to trade 3.5% lower. The company posted
its first annual profit, with fourth quarter profit jumping
121%.  
    Iron ore miner Vale was the biggest boost,
tracking a rise in prices of the steel-making ingredient.

    Chile stocks rose 0.3%, but the world's No. 2
lithium producer SQM fell after it reported
a slump in profits in the last quarter of 2019 and warned that
early 2020 sales in China could be hit by coronavirus.

    
    Key Latin American stock indexes and currencies at 1400 GMT:
   Stock indexes            Latest    Daily %
                                      change
 MSCI Emerging Markets       1027.09     0.99
                                      
 MSCI LatAm                  2481.56     0.05
                                      
 Brazil Bovespa            106558.55    -0.06
                                      
 Mexico IPC                        -        -
                                      
 Chile IPSA                  4294.36     0.25
                                      
 Argentina MerVal                  -        -
                                      
 Colombia COLCAP                   -        -
                                      
                                             
       Currencies           Latest    Daily %
                                      change
 Brazil real                  4.5030    -0.39
                                      
 Mexico peso                 19.5460    -0.75
                                      
 Chile peso                    812.8    -0.02
                                      
 Colombia peso               3480.47    -0.59
 Peru sol                     3.4458    -0.14
                                      
 Argentina peso                    -        -
 (interbank)                          
                                      
 
 (Reporting by Susan Mathew in Bengaluru;
Editing by Alistair Bell)
  
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