February 21, 2013 / 1:10 AM / 5 years ago

EMERGING MARKETS-Latam currencies slip on Europe woes, Fed minutes

* Real falls 0.51 pct on weak economic data
    * Mexican peso dips 0.73, as Fed minutes hint at tightening

    By Alexandra Alper and Jean Arce
    MEXICO CITY, Feb 20 (Reuters) - Latin American currencies
cooled on Wednesday as a strike in Greece and weak Italian data
renewed concerns of stagnation in the euro zone and U.S. Federal
Reserve minutes suggested the central bank may slow or stop
buying bonds sooner than expected.
    Tens of thousands of Greeks took to the streets of Athens 
as part of a nationwide strike against austerity, while data
showed Italian industrial orders fell in December.
    "The news out of Europe rekindles ever-present themes of
insolvency in these nations," which dampens risk appetite, said
Enrique Alvarez, an economist at IDEAglobal. 
    The Brazilian real fell 0.51 percent to trade at 1.9645 per
dollar after data showed weaker-than-expected economic activity
in December and the central bank hinted it was not ready to
raise rates to tackle inflation.  
    "You are still sort of lifting the curtain up on different
metrics related to where Brazil stood at the end of last year
and they are not good," Alvarez said.
    Data on Wednesday showed Brazil's fragile economic recovery
lost steam in December, rounding out a second straight year of
frustrating growth and casting doubts on a steady rebound going
     Central Bank President Alexandre Tombini on Tuesday said
the bank is ready to "adjust" monetary policy if needed, but he
added that inflation is not spiraling out of control,
reinforcing the view that the bank is not going to take any
action just yet.
    Still, Alvarez said he expects the real could get as strong
as 1.90 per dollar in the next two to three months as the
central bank lets the currency appreciate.
    The Mexican peso fell 0.73 percent to 12.7230 per dollar,
after Federal Reserve minutes showed a number of officials think
the bank might have to slow or stop buying bonds before seeing
the pickup in hiring the program is designed to deliver.
    The Fed's easy monetary policy has supported riskier assets
but further signs that U.S. policymakers could tighten policy
could sap demand for assets such as emerging market stocks.
    "You realize in the minutes that there is a certain
division, it's a minority but each time stronger, of officials
that are in favor of ending this bond buying program," said
Jorge Gordillo, an analyst at CI Banco in Mexico City. He added
that the peso could weaken to 12.90 per dollar by the end of the

    Latin American FX prices at 23:55 GMT:
 Currencies                        daily   YTD %
                                       %  change
 Brazil real             1.9645    -0.51    3.84
 Mexico peso             12.7230   -0.73    1.10
 Chile peso              473.000   -0.23    1.21
 Colombia peso           1792.20   -0.08   -1.46
 Peru sol                 2.5820   -0.04   -1.20
 Argentina peso           5.0200   -0.15   -2.14

 Argentina peso           7.7900   -1.16  -12.97

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