January 29, 2015 / 4:30 PM / 4 years ago

EMERGING MARKETS-Latam currencies weaken on Fed outlook

SAO PAULO, Jan 29 (Reuters) - Latin American currencies
weakened against the dollar on Thursday after the U.S. Federal
Reserve maintained an optimistic outlook for the world's largest
economy and signaled it was on track to raise interest rates in
    Equity markets were broadly lower, with the MSCI Latin
American stock index slipping for the fourth
session in five.
    The Fed on Wednesday said the U.S. economy was expanding "at
a solid pace" with strong job gains, fueling expectations that
it would not postpone an expected interest rate hike this year.
    Higher U.S. interest rates are expected to drive funds out
of riskier emerging markets and contribute to currency weakness
in the region.
    "It's clear that the U.S. economy is going to have to look
much worse for the Fed to decide to postpone a rate hike," said
Reginaldo Galhardo, head of currency trading at brokerage
Treviso in Sao Paulo.
    The Brazilian real weakened its most in over a week,
while the Colombian peso fell its most since early
    Chile's peso flirted with six-year lows, tracking a
nearly 2 percent fall in the price for copper, the
country's main export. 
    In equity markets, Brazil's Bovespa stock index 
added to the previous session's losses, again weighed down by
shares of state-run oil firm Petrobras.
    Shares of the company formally known as Petroleo Brasileiro
SA have lost about 62 percent of their value since the start of
September on concerns about government intervention in the
company and an ongoing multibillion-dollar corruption
    Mexico's IPC stock index and Chile's IPSA stock index
 also posted modest losses.

    Key Latin American stock indexes and currencies at 1616 GMT:
 Stock indexes                           daily %     YTD %
                             Latest       change    change
 MSCI Emerging Markets          971.14     -1.37      2.96
 MSCI LatAm                    2640.07     -1.27     -1.97
 Brazil Bovespa               47589.09     -0.22     -4.84
 Mexico IPC                   41894.42     -0.63     -2.90
 Chile IPSA                    3836.06     -0.24     -0.39
 Chile IGPA                   18770.26     -0.23     -0.53
 Argentina MerVal             8526.159      -2.8     -0.62
 Colombia IGBC                10628.95     -0.63     -8.64
 Peru IGRA                    13531.04     -0.73     -8.54
 Venezuela IBC                 3880.32      0.02      0.56
 Currencies                              daily %     YTD %
                                          change    change
 Brazil real                    2.6075     -1.25      1.92
 Mexico peso                   14.8382     -0.60     -0.63
 Chile peso                      627.2     -0.59     -3.32
 Colombia peso                 2407.85     -1.86     -0.82
 Peru sol                        3.048     -0.56     -2.26
 Argentina peso                 8.6325      0.00     -0.96
 Argentina peso                  13.63      0.88      2.71
 (Reporting by Bruno Federowski; Editing by Jonathan Oatis)
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