July 6, 2018 / 10:14 PM / 12 days ago

EMERGING MARKETS-Mexico peso rises after election, posts best week since 2011

 (Updates with details on peso, final market prices)
    By Miguel Gutierrez
    MEXICO CITY, July 6 (Reuters) - Mexico's peso rose on Friday
after U.S. employment data put pressure on the U.S. dollar, and
the peso finished with its strongest weekly gain almost seven
years after a decisive result in the Mexican presidential
election on July 1.
    Most Latin American currencies strengthened on Friday, most
of all the Brazilian real, after data showed U.S. wage growth
was less than forecast in June, suggesting the U.S. Federal
Reserve could take its time before raising interest rates.
    The U.S. economy created more jobs than expected last month
and data from April and May were revised up, but the
unemployment rate rose and growth of average hourly earnings
slowed, suggesting a limited inflationary impact.
    The recent selloff in emerging market currencies slowed as a
result, after suffering under the threat of a full-blown trade
war between the United States and China, as well as from rising
U.S. bond yields and an outlook for a wider U.S. fiscal deficit.
    The Mexican peso advanced almost 0.8 percent, for
an increase of 4.4 percent in the past week and that was the
peso's strongest weekly gain since the one ending Oct. 28, 2011.
    The currency had a rollercoaster week after leftist Andres
Manuel Lopez Obrador won Sunday's presidential election. Lopez
Obrador's nationalist leanings initially spooked investors, but
the peso bounced back after he and his advisors sought to
reassure investors he would stick to fiscal discipline.
    "Even if the market seems to be calm about the first signals
from the next government, looking ahead, the opinion of
financial markets ... could vary depending on how prudently
economic policy, and particularly fiscal policy, is conducted,"
Banco Base said in a note to clients.
    The Brazilian real seesawed and closed up by 1.67
percent.  
    Key Latin American stock indexes and currencies at 2100 GMT:
 
 Stock indexes               Latest      Daily pct   YTD pct
                                            change    change
 MSCI Emerging Markets          1059.97       0.53      -8.5
                                                    
 MSCI LatAm                    2,522.95       0.73    -10.79
 Brazil Bovespa               75,010.39       0.61     -1.82
 Mexico IPC                   48,981.41       0.86     -0.76
 Chile IPSA                    5,284.64       0.34     -5.03
 Chile IGPA                   26,798.14       0.33     -4.23
 Argentina MerVal             27,611.04      -0.73     -8.16
 Colombia IGBC                12,331.03      -0.84      8.45
 Venezuela IBC               126,583.17       3.38  9,921.31
                                                            
 Currencies                      Latest  Daily pct   YTD pct
                                            change    change
 Brazil real                     3.8687       1.67    -14.22
 Mexico peso                    19.0745       0.77      3.27
 Chile peso                       656.6      -0.02     -6.39
 Colombia peso                 2,873.95       0.10      3.76
 Peru sol                         3.285       0.06     -1.46
 Argentina peso (interbank)     27.9100       0.54    -33.36
                                                    
 Argentina peso (parallel)        28.85       0.00    -33.34
                                                    
 
 (Additional reporting by Bruno Federowski; Editing by
Bernadette Baum)
  
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