March 22, 2013 / 7:25 PM / 5 years ago

EMERGING MARKETS-Mexico peso gains on Cyprus; real down on outflows

* Investors encouraged by signs Cyprus will secure financial
    * Brazil real weakens on outflows, cenbank ready to act
    * Mexico peso gains 0.5 pct, Brazil real drops 0.2 pct

    By Walter Brandimarte
    RIO DE JANEIRO, March 22 (Reuters) - The Mexican peso rose
on Friday on signs that Cyprus was close to securing an EU
bailout, but the Brazilian real weakened with traders citing
continued dollar outflows from the country.
    Reports that Cyprus was just hours away from a deal to
prevent a collapse of its banking system encouraged investors to
pour money into higher-yielding emerging market stocks and
    Mexico's peso, the most liquid Latin American
currency, gained 0.5 percent to 12.3800 per dollar, nearing
levels it last hit over 1-1/2 years ago.
    Despite the increased appetite for risk, the Brazilian real
 weakened 0.2 percent to 2.0138 per dollar in its third
consecutive session of losses as greenbacks flowed out of the
    Outflows from Brazil totaled $726 million in the first 20
days of March and more than $3.2 billion since the beginning of
the year, according to central bank data.
    "Dollars have been in short supply since December," said
Reginaldo Siaca, a manager at Advanced brokerage in Sao Paulo.
He forecast the central bank may soon intervene in the market if
the exchange rate continues to depreciate towards 2.03 reais per
    Reinforcing expectations of government action, Brazil's
central bank president Alexandre Tombini said in an event in Sao
Paulo that the bank stands ready to intervene to ensure the
currency market works properly. 
    In Argentina, peso trading on the black market shriveled on
Friday after government officials reportedly pressured players
to freeze operations before the Easter holidays begin late next
week, traders in Buenos Aires said.
    The Argentine peso closed at 8.42/8.48 per dollar on Friday
, according to Reuters, easing back after the ask price
surged to 8.75 per dollar on Wednesday amid uncertainty over the
government's currency policy.
    On the official interbank market, the peso was trading at
5.11/5.1125 per dollar. This represents a 66 percent
gap, or spread, versus the black market.

    Latin American FX prices at 1850 GMT:
 Currencies                         daily %    YTD %
                                     change   change
 Brazil real                2.0138    -0.21     1.30
 Mexico peso               12.3800     0.48     3.91
 Chile peso               472.7000    -0.02     1.27
 Colombia peso           1829.1000    -0.51    -3.45
 Peru sol                   2.5900     0.04    -1.51
 Argentina peso             5.1100    -0.20    -3.86

 Argentina peso             8.4200     0.36   -19.48
0 : 0
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