March 26, 2020 / 7:48 PM / 2 months ago

EMERGING MARKETS-Latam FX, stocks extend gains to third straight session

    * Stocks, FX add more than 4% over past 3 sessions
    * Exaggerated FX moves may be sparse now- Analyst
    * Colombian stocks jump 25% in two days

 (Adds comment, updates prices)
    By Ambar Warrick and Susan Mathew
    March 26 (Reuters) - Latin American currencies extended
gains to a third day on Thursday after record-high U.S. jobless
claims and increased dollar liquidity saw the greenback retreat.
    The MSCI's index of Latin American currencies
 rose about 2%, adding nearly 4% over the past
three days.
    Mexico's peso added 3%, while Brazil's real
firmed slightly, as the flood of monetary and fiscal stimulus
from the United States eased some funding concerns, keeping the
dollar pressured.
    "Measures taken on both the fiscal and monetary front and
signs of reducing USD funding squeeze suggest that global FX
markets may be about to exit the period of profound,
indiscriminative moves, where the USD appreciates abruptly,"
Petr Krpata, chief EMEA FX and IR Strategist at ING wrote in a
note.
    "Still, currencies may fall further vs USD, but the fall may
be more well-behaved from here." 
    On Thursday, the greenback deepened losses after data showed
U.S. weekly jobless claims shot up from 282,000 last week. The
number came in above forecasts and showed how deeply the
coronavirus pandemic had impacted the economy, forcing layoffs.

    The dollar's weakness this week has helped Latam currencies
lift from all-time lows, following panicked exits from
risk-heavy emerging markets due to the coronavirus outbreak
bringing the global economy to its knees. 
    Chile's peso and Colombia's peso both rose
about 2%.
    The optimism helped investors look past Brazil's central
bank slashing its 2020 economic growth forecast for the country
to zero percent from 2.2%.
   Still, the rally appeared to be running out of steam, with
curbs in movement and trade still in place as the outbreak
gained traction in Latin America.
    
    STOCKS RALLY TOO
    The MSCI's index of Latin American stocks
added about 4% for the day, tracking strength in Wall Street as
the dismal unemployment claims data raised the prospect of
further stimulus measures.
    The index gained for a third straight session, adding about
4.6% as it recovered from a 16-year low. 
    Brazilian stocks added 2.6% for the day.
    Planemaker Embraer fell 4.6% after it reported a
net loss for the fourth quarter of 2019.  
    Colombia stocks surged 11%, building on
Wednesday's 13% jump. 
    Sao-Paulo listed shares jumped 2.4% while those in
Santiago rose 2.9%. 

    
    Key Latin American stock indexes and currencies at 1939 GMT:
    
    Stock indexes             Latest    Daily % change
 MSCI Emerging Markets          850.83             1.71
                                        
 MSCI LatAm                    1677.25             4.11
                                        
 Brazil Bovespa               76819.17             2.49
                                        
 Mexico IPC                   36187.24             1.83
                                        
 Chile IPSA                    3213.59              2.9
                                        
 Argentina MerVal             25953.06           -1.462
                                        
 Colombia COLCAP               1158.73            10.76
                                        
                                                       
       Currencies             Latest    Daily % change
 Brazil real                    5.0093             0.45
                                        
 Mexico peso                   23.1706             3.28
                                        
 Chile peso                      827.4             2.07
                                        
 Colombia peso                    3981             2.08
 Peru sol                        3.396             2.35
                                        
 Argentina peso                64.2275            -0.28
 (interbank)                            
                                        
 
 (Reporting by Susan Mathew in Bengaluru
Editing by Nick Zieminski and Marguerita Choy)
  
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