May 26, 2016 / 10:00 PM / 3 years ago

EMERGING MARKETS-Latam currencies gain, Mexico rules out imminent hike

MEXICO CITY, May 26 (Reuters) - Latin American currencies
strengthened on Thursday after weak U.S. data on business
spending plans dampened expectations for a Federal Reserve
interest rate increase in the coming months.
    U.S. Commerce Department data showed non-defense capital
goods orders excluding aircraft, a closely watched proxy for
business spending plans, fell for the third month in a row in
    Riskier assets like emerging market currencies have fallen 
in May on expectations that the U.S. Federal Reserve could raise
interest rates in June or July which could push investors to
sell emerging market debt and buy U.S. Treasuries.
    Mexico's peso has shed nearly 7.0 percent in May, the second
worst performer among the 36-most traded currencies, behind the
South African rand. The peso's tumble stoked expectations that
Mexico could intervene in currency markets or raise interest
rates next month in a bid to defend the currency.
    Mexico central bank Governor Agustin Carstens on Thursday
said he saw no current need for an extraordinary rate-setting
meeting. On Wednesday, Carstens said he saw no sign of a
speculative attack on the peso. 
    A sharp drop in Mexico's peso pushed the central bank in
February to intervene directly in currency markets for the first
time since 2009 and to raise interest rates unexpectedly after
an unannounced meeting.
    The peso closed up 0.24 percent. 
    The IPC stock index closed the day up 0.72 percent, with
shares in retailer Walmex, up 1.97 percent, driving
gains. Shares in breadmaker Bimbo fell 1.85 percent.
    Brazilian markets were closed on Thursday for Corpus Christi
    The Chilean peso rose 0.54 percent, helped by a
rise in the price of copper, the country's main export. 
    Key Latin American stock indexes and currencies at 21:43
 Stock indexes                  Latest    Daily pct   YTD pct
                                           change     change
 MSCI Emerging Markets          803.74      0.51        0.7
 MSCI LatAm                    2,077.27     0.45       13.01
 Brazil Bovespa                49,482.86    0.28       14.15
 Mexico IPC                    46,039.69    0.72       7.12
 Chile IPSA                    3,952.18     -0.16      7.39
 Chile IGPA                    19,505.54    -0.1       7.46
 Argentina MerVal              12,727.75    2.79       9.02
 Colombia IGBC                 9,684.84     -0.24      13.31
 Venezuela IBC                 15,350.84    0.24       5.23
 Currencies                     Latest    Daily pct   YTD pct
                                           change     change
 Brazil real                    3.5830      0.37       10.50
 Mexico peso                    18.4455     0.24       -6.59
 Chile peso                      687.5      0.54       3.23
 Colombia peso                 3,051.85     0.27       3.85
 Peru sol                        3.344      -0.15      2.09
 Argentina peso (interbank)     13.9900     0.46       -7.20
 Argentina peso (parallel)       14.62      0.27       -2.39
 (Reporting by Gabriel Stargardter, editing by Michael O'Boyle)
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