Reuters: US Dollar Report: EMERGING MARKETS-Brazil real gains, but Mexican peso off on Fed's view

Reuters: US Dollar Report Reuters.com is your source for breaking news, business, financial and investing news, including personal finance and stocks. Reuters is the leading global provider of news, financial information and technology solutions to the world's media, financial institutions, businesses and individuals. // via fulltextrssfeed.com

EMERGING MARKETS-Brazil real gains, but Mexican peso off on Fed's view Apr 3rd 2012, 21:06 Tue Apr 3, 2012 5:06pm EDT * Brazil's real up 0.3 pct, Mexico's peso off 0.4 pct * Brazil's finance minister: Currency rate "reasonable" * Chile's peso strongest in month after cenbank's forecast By Caroline Stauffer and Jean Luis Arce SAO PAULO/MEXICO CITY, April 3 (Reuters) - Brazil's real strengthened on Tuesday after the country posted better-than-expected industrial output numbers while the Mexican peso lost ground as minutes from the U.S. Federal Reserve's March policy meeting dampened stimulus hopes. Data in Brazil showed industrial production, which has held back e conomic growth in the past year, rose 1.3 percent in February. Revised statistics also showed a smaller decline in January output than had initially been reported. Finance Minister Guido Mantega later said the real's current exchange rate is "reasonable" for local industries, easing concerns that Brazil's policymakers will take aggressive action to weaken the real as they implement policies to relieve ailing industries. The real strengthened 0.26 percent to close bidding at 1.8257 per U.S. dollar on the local spot market. "They don't need to be intervening as strongly any more since the market is holding at levels they feel comfortable with," said Klaus Spielkamp, a trader at Bulltick Capital Markets in Miami. "We see demand from investors outside of Brazil willing to place a bet on the valuation of the real," he added. Local industries' top executives have blamed a strong currency for a decline in Brazilian production over the past year and policymakers have committed to weakening the currency to help domestic manufacturers compete with cheap imports. The real has weakened about 5.4 percent since February, when the central bank purchased dollars in the spot market for the first time since September. The bank held an auction to buy dollars on Tuesday, as the currency gained. Mexico's peso, meanwhile, weakened 0.35 percent to 12.764 per dollar after the latest minutes from the U.S. Federal Reserve scaled back hopes for more monetary stimulus. The minutes from the Federal Open Market Committee suggested the Fed is not likely to give markets an additional round of quantitative easing, a policy tool that in recent years has benefited high-yielding emerging market assets. Latin America's currencies strengthened last week after comments from Fed Chairman Ben Bernanke seemed to leave the door open for another cash injection. "Bernanke was misunderstood last week, and today (Tuesday) the markets were disappointed after the minutes," said Jorge Gordillo, deputy director of analysis at CI Bank in Mexico City. Before the Fed minutes were released, the Chilean peso posted its strongest close in a month, bidding 0.2 percent stronger at 482.15 per dollar. Chile's central bank revised its 2012 forecast for growth and inflation upward on Tuesday, raising the prospect of higher returns for investors. "The monetary policy report set the tone for today (Tuesday), since the figures given there suggested the central bank will have to raise rates," said one currency trader in Santiago, who asked not to be named. Link this Share this Digg this Email Reprints

You are receiving this email because you subscribed to this feed at blogtrottr.com. If you no longer wish to receive these emails, you can unsubscribe from this feed, or manage all your subscriptions