November 27, 2018 / 9:48 PM / 14 days ago

EMERGING MARKETS-Most Latin American currencies rise after Monday dive

 (Recasts throughout, updates prices)
    By Susan Mathew
    Nov 27 (Reuters) - A strong dollar and trade worries did
little to dent most Latin American currencies as domestic
factors helped them recoup from last session's heavy losses,
with Brazil's real ending a six-day losing run.
    The real firmed 1.7 percent and posted its best day
in eight weeks as Brazil's central bank offered $2 billion in
two line auctions, aimed at providing liquidity to the market.
    "The central bank's tendency to conduct line auctions at the
end of the year when companies usually remit funds abroad is
well-known," analysts at H Commcor said in a note.
    But there was no denying the bank's move was in response to
the currency's dive on Monday, the note said.
    The real slipped nearly 3 percent on Monday as some doubt
was cast on smooth passage of President-elect Jair Bolsonaro's
pension reform agenda.
    Some traders said strength in the currency also contributed
in part to gains on the Bovespa stock index which surged
2.7 percent with most sectors in the black.
    Shares of state electricity company Eletrobras
 rose as a court decision allowed it to proceed with
the sale of its distribution companies, putting the company
on-track for its planned privatization.
    The Mexican peso gained 0.7 percent, while the stock
index rose for the first time in six days adding nearly 1
percent after Monday's 4 percent plunge. 
    Markets were soothed by comments from the incoming finance
minister saying he will push for a larger primary budget surplus
next year, seeking to shore up investor confidence after the
previous session's losses.    
    On Monday, migrant issues at Mexico's border with the United
States piled on to investor concerns already frayed by worries
over policies of leftist President-elect Andres Manuel Lopez
Obrador's administration that is set to take office over the
weekend.
    "Nervousness over the policies of the new administration in
Mexico was reduced after the future head of the Ministry of
Finance reassured markets," analysts at Banco BASE said in a
note.    
    The minister also announced the nomination of left-leaning
economist Gerardo Esquivel as central bank deputy governor.

    The nomination of Esquivel is another factor that has
supported the decrease in nervousness since the market considers
him as not representing a risk to monetary policy, the Banco
BASE note said.
    The Argentine peso broke a six-session losing streak
and climbed 1.3 percent after falling more than 4 percent last
session.
    The International Monetary Fund said it completed its second
review of Argentina, paving way for the country to receive $7.6
billion under the $56.3 billion financing deal struck earlier
this year to bolster the country's finances and plug the
currency's free fall.
    
    Key Latin American stock indexes and currencies at 2120 GMT:
 Stock indexes                           daily %     YTD %
                             Latest       change    change
 MSCI Emerging Markets          980.16      0.37    -15.39
                                                  
 MSCI LatAm                    2538.20      1.74    -10.25
                                                  
 Brazil Bovespa               87891.18      2.74     15.04
                                                  
 Mexico IPC                   39811.04      0.97    -19.34
                                                  
 Chile IPSA                    5128.14      -0.1     -0.10
                                                  
 Argentina MerVal             30921.11     -0.68      2.85
                                                  
 Colombia IGBC                12000.49     -0.41      5.54
                                                  
                                                          
 Currencies                              daily %     YTD %
                                          change    change
                                Latest            
 Brazil real                    3.8750      1.72    -14.52
                                                  
 Mexico peso                   20.4690      0.72     -3.76
                                                  
 Chile peso                        675      0.25     -8.94
                                                  
 Colombia peso                  3261.9     -0.59     -8.58
 Peru sol                        3.381     -0.03     -4.26
                                                  
 Argentina peso                38.5300      1.22    -51.73
 (interbank)                                      
                                                  
 

 (Reporting by Susan Mathew in Bengaluru and Claudia Violante in
Sao Paulo; Editing by Chris Reese)
  
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