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EMERGING MARKETS-Latam FX up as Bernanke eases fears of stimulus cut
July 17, 2013 / 4:06 PM / 4 years ago

EMERGING MARKETS-Latam FX up as Bernanke eases fears of stimulus cut

RIO DE JANEIRO, July 17 (Reuters) - Latin American
currencies gained on Wednesday after Federal Reserve Chairman
Ben Bernanke's testimony to Congress was seen as suggesting the
Fed is in no rush to cut back on the stimulus measures that have
been supporting global appetite for risk.
    Bernanke said the U.S. central bank still expects to start
scaling back its massive bond purchase program later this year,
but he assured nothing was set in stone and could change
depending on the economic outlook. 
    "Bernanke made a speech that reinforced the view of a more
gradual withdrawal of the bond-buying program. That caused the
dollar to lose steam globally," said Flavio Serrano, chief
economist with Espirito Santo Investment Bank in Sao Paulo.
    * Brazil's real  rose 0.7 percent to 2.2369 per
dollar, recovering most of its Tuesday's losses.
    * Investors in Brazil are also waiting for the minutes of
the central bank's latest monetary policy meeting to be released
on Thursday morning. They await signs about the length of the
current monetary tightening cycle, which has a direct impact on
the attractiveness of the currency.
    * Mexico's peso firmed 0.6 percent to 12.55 per
dollar. It initially gained to as much as 12.5082 per greenback,
briefly crossing its 100-day simple moving average. 
    * The Mexican currency has been supported by expectations of
ongoing structural reforms in investment. President Enrique Pena
Nieto's announcement on Monday that $300 billion are expected to
be invested in major infrastructure projects over his six-year
term supported market optimism, analysts said. 
    * "Mexico is one of the few large emerging markets where
potential GDP has increased recently. Several factors are behind
this increase, and not just the current reform drive," Bank of
America Merrill Lynch analyst Carlos Capistran wrote in a
research note, in which he also highlights the positive impact
of a demographic boom that will keep supporting the job market
for another 15 years. 

    Latin American FX prices at 1540 GMT:
 Currencies                         daily %    YTD %
                                     change   change
 Brazil real                2.2369     0.74    -8.80
 Mexico peso               12.5300     0.72     2.67
 Chile peso               497.8000     0.70    -3.84
 Colombia peso           1873.0000     0.37    -5.71
 Peru sol                   2.7580     0.15    -7.51
 Argentina peso             5.4375    -0.05    -9.66

 Argentina peso             8.9700    -2.45   -24.41

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