March 20, 2014 / 4:55 PM / in 4 years

EMERGING MARKETS-Latam currencies rebound after U.S., Colombia data

By Asher Levine
    SAO PAULO, March 20 (Reuters) - Latin American currencies
rebounded on Thursday while stock markets advanced as
encouraging economic data in the U.S. and Colombia offset
concerns over a sooner-than-expected increase in U.S. interest
    The region's currencies sank late on Wednesday after U.S.
Federal Reserve chief Janet Yellen suggested the central bank
could increase interest rates "around six months" after it
finishes unwinding its monetary stimulus program, a shorter time
frame than many market participants had anticipated.
    Nearly every currency across Latin America strengthened
against the dollar on Thursday, however, after the Philadelphia
Federal Reserve Bank said its business activity index rose far
more than expected in March. Local traders said the data helped
feed risk appetite among global investors.
    Colombia's peso posted the region's strongest gains
against the dollar after data showed the country's economy grew
4.3 percent in 2013, beating market expectations.
    Mexico's peso bounced up off an over six-week low hit
in the previous session, though gains were slight.
    Mexican Finance Minister Luis Videgaray said on Thursday
Mexico is well positioned to face market volatility and is
working to maintain its flexible credit line with the
International Monetary Fund.
    Local stocks mostly gained, with the MSCI Latin American
stock index rallying for the fourth straight
    Brazil's Bovespa also advanced for a fourth day,
putting it back into slightly positive territory for the month.
The index has not seen a monthly gain since October as jitters
over a weakening economy and an upcoming presidential election
led investors to look for opportunities elsewhere.
    State-controlled companies such as oil producer Petroleo
Brasileiro SA, electric utility Eletrobras 
and lender Banco do Brasil continued to post strong
gains, with traders expecting an upcoming poll to show
opposition candidates gaining on President Dilma Rousseff. 
    Many investors have been critical of the Rousseff
administration for heavy-handed government intervention in the
private sector and policies that run against the interests of
minority shareholders in state-controlled firms.
    Private-sector banks such as Banco Bradesco SA 
and Itau Unibanco Holdings SA also rose. Liquidity
risks to Brazil's lenders should remain stable in the first half
of 2014, central bank director Anthero Meirelles said on
    Despite its mediocre performance over the past 12 months,
the Bovespa is likely to move higher this year amid a global
economic recovery, a Reuters poll showed, while Mexican shares
will likely gain on the back of market reforms. 
    Mexico's IPC index rose to a 39,300 points, a level
it has not closed above since late February, led by a 2.6
percent gain in bottling firm Femsa. 
    Chile's IPSA index was little changed, though shares
of conglomerate Copec dropped 0.9 percent after the
company reported a lower-than-expected quarterly profit.

    Key Latin American stock indexes and currencies at 1625 GMT:
 Stock indexes                             daily %     YTD %
                               Latest       change    change
 MSCI Emerging Markets             939.5     -1.17      -5.2
 MSCI LatAm                      2957.99         1      -8.5
 Brazil Bovespa                 47163.54      1.28     -8.43
 Mexico IPC                     39303.96      1.27     -8.01
 Chile IPSA                      3643.36      0.13     -1.51
 Chile IGPA                     18036.94      0.13     -1.04
 Argentina MerVal                 5981.6      1.95     10.95
 Colombia IGBC                  13048.44      0.15     -0.17
 Peru IGRA                       14442.6     -0.09     -8.32
 Venezuela IBC                    2559.5     -1.11     -6.47
 Currencies                                daily %     YTD %
                                            change    change
 Brazil real                      2.3302      0.74      1.14
 Mexico peso                      13.244      0.31     -1.62
 Chile peso                        565.3      0.57     -6.93
 Colombia peso                   1992.54      0.84     -3.04
 Peru sol                           2.81      0.11     -0.60
 Argentina peso (interbank)       7.9575     -0.06    -18.41
 Argentina peso (parallel)         10.88      0.37     -8.09


 (Editing by Meredith Mazzilli)
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