Reuters: US Dollar Report: EMERGING MARKETS-Latam currencies soar on EU deal, cenbank boosts real

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EMERGING MARKETS-Latam currencies soar on EU deal, cenbank boosts real Jun 29th 2012, 14:33 Tweet Share this Email Print Related Topics Stocks » Currencies » Bonds News » Bonds » Markets » Energy » Fri Jun 29, 2012 10:33am EDT * Eurozone measures reduce Spain, Italy borrowing costs * Brazil eases restrictions on funding for export prepayment * Brazil real jumps as much as 3 pct, Mexico peso up 1.7 pct By Walter Brandimarte RIO DE JANEIRO, June 29 (Reuters) - Latin American currencies rallied on Friday after euro zone leaders allowed the region's rescue funds to recapitalize banks, while a measure by the Brazilian government facilitating dollar inflows further boosted the real. The Brazilian currency jumped as much as 3 percent after the central bank eased rules on export prepayment and sold 60,000 currency swaps in an auction. While the first measure allows more dollars to flow into the country, the swap auction boosts the supply of greenbacks in the futures market. The real last traded 2.7 percent stronger at 2.0217 per dollar, after gaining to as much as 2.0114 earlier. The export prepayment measure was announced late on Thursday when the real weakened to near the level of 2.1 per dollar, leading many investors to believe the central bank was drawing a strong line around that level. "This is the 4th measure implemented since December 2011 by the Ministry of Finance together with the central bank towards facilitating capital mobility (inflows in particular), after several years of constraining inflows," JPMorgan's analysts noted in a research note. Other Latin American currencies also posted strong gains after EU leaders agreed on Friday to let their rescue fund inject aid directly into their banks, as well as to intervene on bond markets to support troubled member states. Against the dollar, the Mexican peso jumped 1.7 percent while the Chilean peso gained 1.5 percent as global markets rallied. The measures in Europe were a positive surprise for investors who had very low hopes about the ability of euro-zone leaders to agree on a way out of the crisis. Worldwide, it rekindled an appetite for investment in riskier assets, like equities and emerging market currencies. Latin American FX prices from Reuters at 1420 GMT: Currencies daily % YTD % change change Latest Brazil real 2.0217 2.67 -7.58 Mexico peso 13.3780 1.73 4.42 Argentina peso* 5.9500 0.50 -20.50 Chile peso 501.6000 1.54 3.53 Colombia peso 1,785.3500 1.22 8.57 Peru sol 2.6640 0.08 1.24 * Argentine peso's rate between brokerages Related Quotes and News Company Price Related News Tweet this Link this Share this Digg this Email Reprints We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/ Comments (0) Be the first to comment on reuters.com. Add yours using the box above.

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