April 17, 2014 / 5:15 PM / 4 years ago

EMERGING MARKETS-Real drops on pre-holiday caution; Chile cenbank awaited

RIO DE JANEIRO, April 17 (Reuters) - The Brazilian real
weakened more than half a percentage point on Thursday as
investors turned cautious ahead of a long holiday weekend, while
the Chilean peso edged lower ahead of a key central bank
decision on interest rates.
    Trading volumes were thin as many traders took off for the
Easter holiday; the Mexican bourse was closed on
    Brazilian financial markets will be shut on Friday and will
not reopen until on Tuesday, because the country celebrates a
local holiday right after Easter this year.
    "The FX market will be closed for four days, so a few
players are building (dollar) positions for protection," said
Jaime Ferreira, a currency desk manager at Intercam, a brokerage
in Sao Paulo.
    The real  dropped 0.6 percent to 2.2530 per
dollar, its weakest level in more than 10 days.
    Chile's peso slid 0.15 percent as some investors
sought protection against the off chance of another interest
rate cut by the central bank later in the day.
    The Chilean central bank is widely seen holding rates steady
at 4.0 percent on Thursday, halting a monetary easing cycle that
has shaved 100 basis points off the country's base interest rate
since October. 
    Latin American shares were little changed, with MSCI's
benchmark stock index for the region 0.3 percent
    Brazil's Bovespa index gained 0.3 percent,
recovering from early losses. The index was prone to swings
before Tuesday's expiration of stock options, traders said.
    Shares of Brazilian homebuilders such as Rossi Residencial
, MRV Engenharia, and PDG Realty 
all fell more than 2 percent after Deutsche Bank cut its
recommendation on the stocks, saying the outlook for the real
state sector is expected to worsen in the next few months. 

    Key Latin American stock indexes and currencies at 1655 GMT:
     Stock indexes                     daily %    YTD %
                          Latest       change     change
 MSCI Emerging Markets   1007.56       0.5        -0.02
 MSCI LatAm              3241.36       -0.16      1.43
 Brazil Bovespa          51424.33      0.44       -0.16
 Mexico IPC              Holiday       n/a        -4.30
 Chile IPSA              3896.08       -0.41      5.32
 Chile IGPA              19102.99      -0.33      4.81
 Currencies                            daily %    YTD %
                                       change     change
 Brazil real             2.2530        -0.58      4.61
 Mexico peso             13.0625       0.01       -0.25
 Chile peso              557.1         -0.16      -5.56
 (Reporting by Walter Brandimarte, Priscila Jordao and Bruno
Federowski; Editing by Leslie Adler)

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