June 12, 2012 / 3:18 PM / in 6 years

EMERGING MARKETS-Mexico peso rebounds, other Latam currencies fall

* Mexico peso gains in line with silver prices
    * Brazilian real flat as investors watch cenbank
    * Greece elections, Spain bank worries weigh on markets

    By Walter Brandimarte	
    SAO PAULO, June 12 (Reuters) - Mexico's peso rebounded on
Tuesday after sliding more than 1 percent in the previous
session, but other Latin American currencies were little changed
as investors remained cautious ahead of key weekend elections in
Greece that will determine the nation's future in the euro zone.	
    The Mexican peso gained 0.7 percent to 14.0055 per
dollar, showing some correlation with gains in the price of
silver, the country's second largest export product.
    The Brazilian real  was unchanged at 2.0569 per
greenback, however, as investors wondered whether the central
bank would intervene more aggressively to curb the weakening of
the currency, which closed on Monday near three-year lows. 	
    The real slumped about 1.5 percent on Monday on fears that a
rescue package for Spanish banks may not be enough to stop the
euro-zone debt crisis from spreading further. The sell-off
intensified in the afternoon, even after the central bank
intervened in the market with a small auction of currency swaps.
    "With market talk of specific European bank related outflows
behind weak price action at the start of this week, the
Brazilian central bank is likely saving its ammunition, though
making sure it remains present in the market in order to stem
currency weakness," said Flavia Cattan-Naslausky, Latin American
currency strategist with RBS Securities.	
    Adding to the gloomy outlook, Brazil's central bank chief
Alexandre Tombini said he expects the global economy to grow
slowly and financial remarks to remain volatile for the next two
    Latin American FX prices from Reuters at 1452 GMT:	
 Currencies                            daily %  yearly %
                                        change    change
 Brazil real                  2.0569      0.00     -9.16
 Mexico peso                 14.0055      0.67     -0.26
 Argentina peso*              5.8700      1.36    -19.42
 Chile peso                 504.2000     -0.14      2.99
 Colombia peso            1,776.5000      0.03      9.11
 Peru sol                     2.6900     -0.26      0.26
 * Argentine peso's rate between                        
0 : 0
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