October 9, 2017 / 4:34 PM / a year ago

EMERGING MARKETS-Mexico peso hits 4-month low ahead of NAFTA talks

    By Bruno Federowski
    SAO PAULO, Oct 9 (Reuters) - Mexico's peso slipped to its
weakest in more than four months on Monday, mirroring a fall in
other Latin American currencies, ahead of the latest round of
talks over the North American Free Trade Agreement (NAFTA).
    The peso fell 0.6 percent to 18.65 to the dollar,
roughly in line with losses on the Brazilian and
Colombian currencies.
    Demand for high-yielding assets has waned since Friday, when
data showing rising U.S. wages fueled bets that the Federal
Reserve will increase interest rates faster than expected in
coming months.
    Fears of increased U.S. protectionism have hit the Mexican
peso particularly hard as the United States purchases over
three-quarters of Mexico's exports.
    Trade officials from Mexico, the United States and Canada
meet on Wednesday in the Washington area for a fourth round of
talks on renegotiating NAFTA amid signs of increasing tension
over the accord between Mexico and the administration of U.S.
President Donald Trump.
    Trump's "America First" policy has raised questions about
his government's desire to maintain NAFTA. Mexican officials
said last week that Trump risks sparking a "protectionist war"
with his demands.
    Brazil's benchmark Bovespa stock index slipped 1
percent, weighed down by a decline in shares of miner Vale SA
 on the heels of falling iron ore futures.
    Still, shares in sewage and water utility Cia de Saneamento
Básico do Estado de São Paulo SA rose 2.4 percent
after regulators sanctioned a 7.8888 percent tariff hike.
    Chilean markets were closed for the Columbus Day holiday.
    Key Latin American stock indexes and currencies at 1610 GMT:
 Stock indexes                                 daily %    YTD %
                                                change   change
 MSCI Emerging Markets              1100.26      -0.26    27.93
 MSCI LatAm                         2918.32       -1.2    26.19
 Brazil Bovespa                    75310.57      -0.98    25.04
 Mexico S&P/BVM IPC                50171.82      -0.26     9.92
 Argentina MerVal                  26827.78       0.11    58.58
 Colombia IGBC                     11061.75      -0.52     9.22
 Venezuela IBC                       519.81     -99.91   -98.36
 Currencies                                    daily %    YTD %
                                                change   change
 Brazil real                         3.1846      -0.86     2.03
 Mexico peso                        18.6515      -0.59    11.22
 Colombia peso                       2947.3      -0.40     1.84
 Peru sol                             3.272      -0.09     4.34
 Argentina peso (interbank)         17.5000      -0.29    -9.29
 Argentina peso (parallel)            17.78       0.00    -5.40
 (Reporting by Bruno Federowski; Editing by W Simon)
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