December 13, 2017 / 11:35 PM / in a month

EMERGING MARKETS-Mexico peso firms after Fed maintains U.S. rate outlook

    By Bruno Federowski and Sheky Espejo
    Dec 13 (Reuters) - Mexico's peso currency and stocks firmed
on Wednesday after the U.S. Federal Reserve raised the cost of
borrowing, but did not signal that it could pick up the pace of
rate hikes next year.
    Signs of quicker U.S. economic growth had prompted
speculation that the Fed could have forecast more rate hikes
next year. But the U.S. central bank's forecast of three hikes
in 2018 and 2019 was unchanged from its projections in
September.
    Rising U.S. interest rates can sap demand for emerging
market debt and currencies, which are seen as higher risk than
dollar-backed assets. 
    The peso was trading at 19.0050 per dollar on
Wednesday afternoon, up 0.86 percent compared to the dollar
reference price of 19.1750 pesos from Tuesday.
    Mexico's central bank is seen raising its benchmark interest
rate on Thursday to match the Fed hike as well as to counter a
recent uptick in inflation, according to a Reuters poll.

    The benchmark S&P/BMV IPC index closed up 1.21
percent, with bottler and retailer Femsa rising 2.2
percent.
    Chilean stocks also rose, while in Brazil
shares closed 1.22 percent lower.
    Phone carrier Oi SA slumped after it reached a
deal with two major creditor groups on a plan to recover the
company from bankruptcy protection that would give bondholders
up to 75 percent of the company's shares.

    Key Latin American stock indexes at 2220 GMT: 
 Stock indexes                 Latest     Daily pct    YTD pct
                                           change       change
 MSCI Emerging Markets          1118.81         0.58       29.75
                                                      
 MSCI LatAm                    2,732.29         0.52       16.73
                                                      
 Brazil Bovespa               72,914.33        -1.22       21.07
 Mexico IPC                   48,276.72         1.21        5.77
 Chile IPSA                    5,135.19         1.89       23.70
 Chile IGPA                   25,780.68         1.76       24.34
 Argentina MerVal             27,034.57        -1.12       59.80
 Colombia IGBC                11,098.35         0.23        9.58
 Venezuela IBC                 1,257.62        -0.41      -96.03
 
 (Reporting by Bruno Federowski in Brasilia and Sheky Espejo in
Mexico City.)
  
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