August 27, 2018 / 8:42 PM / 3 months ago

EMERGING MARKETS-Mexican peso, stocks jump on U.S.-Mexico NAFTA deal

    By Bruno Federowski
    MEXICO CITY, Aug 27 (Reuters) - The Mexican peso and stock
index jumped on Monday after the United States and Mexico
reached a deal to overhaul the North American Free Trade
Agreement (NAFTA), boosting hopes of a swift end to negotiations
that had dragged on for a year. 
    The peso initially strengthened 1.2 percent against
the dollar, leading gains among Latin American currencies. It
later paired gains but still was up 0.84 percent at 1950 GMT.
    The United States and Mexico said they reached an agreement
on bilateral issues in NAFTA on Monday, putting pressure on
Canada to agree to new terms to remain part of the three-nation
pact.
    Separately, Mexican President Enrique Pena Nieto said on
Twitter that he had spoken with Canadian Prime Minister Justin
Trudeau on the importance of Canada rejoining the talks with the
aim of concluding the trilateral negotiation this week.
    Mexican stocks also rose 1.63 percent, while Brazil's
Bovespa index rose 1.93 percent.
    Emerging market currencies in general strengthened for a
second trading day, supported by a speech by Federal Reserve
Chair Jerome Powell suggesting a slow pace of U.S. interest rate
hikes.
    At a symposium in Jackson Hole, Wyoming, Powell on Friday
emphasized the central bank's push to raise interest rates
despite President Donald Trump's criticism of higher borrowing
costs. But he also said the Fed sees no clear sign of inflation
accelerating above 2 percent.
    Powell's comments did little to change market expectations
for rate hikes in September and December and disappointed some
dollar bulls hoping for a more hawkish message.
    
    Key Latin American stock indexes and currencies at 1950 GMT:
 
 Stock indexes                                 daily %     YTD %
                                                change    change
                                   Latest               
 MSCI Emerging Markets               1068.74      1.77     -9.35
 MSCI LatAm                          2534.30      1.73    -11.92
 Brazil Bovespa                     77737.33      1.93      1.75
 Mexico IPC                         50443.72      1.63      2.21
 Argentina MerVal                   25542.06      1.49    -15.05
 Colombia IGBC                      12152.41     -0.28      6.88
 Venezuela IBC                     378306.09     -9.79  29849.66
                                                                
 Currencies                                    daily %     YTD %
                                                change    change
                                      Latest            
 Brazil real                          4.0788      0.61    -18.77
 Mexico peso                         18.7750      0.84      4.92
 Chile peso                            658.6      0.21     -6.67
 Colombia peso                          2941      0.48      1.39
 Peru sol                              3.288      0.21     -1.55
 Argentina peso (interbank)          30.9400     -0.06    -39.88
                                                        
 Argentina peso (parallel)             32.35     -2.16    -40.56
                                                        
 
 (Additional reporting by Bruno Federowski and Christine Murray;
Editing by Dan Grebler and Lisa Shumaker)
  
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