Reuters: US Dollar Report: EMERGING MARKETS-Latam currencies fall on Spain bailout fears

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EMERGING MARKETS-Latam currencies fall on Spain bailout fears Jul 20th 2012, 14:51 Tweet Share this Email Print Related Topics Currencies » Bonds News » Bonds » Markets » Fri Jul 20, 2012 10:51am EDT * Spain's Valencia region seeks gov't help to pay debt * Brazil's consumer inflation accelerates * Mexico's central bank keeps base interest rate at 4.5 pct * Brazil real, Mexican peso drop 0.5 pct By Walter Brandimarte RIO DE JANEIRO, July 20 (Reuters) - Latin American currencies fell o n F riday as growing fears that Spain would need a full-blown bailout drove investors into the perceived safety of the U.S. dollar. The euro-zone debt crisis appeared to be taking a turn for the worse after Spain's Valencia region announced it would seek help from the central government to repay its debts. The Brazilian real declined 0.5 percent to 2.0232 per dollar after gaining more than 1 percent in the previous five sessions. On the other hand, Brazil's interest-rate futures rose after data showed consumer inflation accelerated more than expected on higher food costs, suggesting the central bank may have less room than previously believed to cut interest rates much further. Interest rate contracts maturing in January 2013 climbed 2 basis points to 7.43 percent. The Mexican peso fell 0.5 percent after the country's central bank left its benchmark interest rate on hold at 4.5 percent, noting that growing risks of a severe global slowdown could eventually crimp both growth and inflation pressures. The bank also said the impact of a weaker peso on inflation had been limited despite a rise in short-term inflation risks due to a spike in agricultural prices. The Chilean peso lost 0.4 percent after closing at its strongest level in more than two months on Thursday, as European debt concerns knocked down the price of copper, the country's main export product. "Markets are worried about Spain's and Italy's debt problems, which are weighing on the euro," said Sergio Tricio, head of research at Forex Chile. Latin American FX prices at 1435 GMT: Currencies daily % YTD % change change Latest Brazil real 2.0237 -0.51 -7.67 Mexico peso 13.2860 -0.50 5.14 Argentina peso* 6.3700 3.61 -25.75 Chile peso 487.5000 -0.43 6.52 Colombia peso holiday Peru sol 2.6220 -0.04 2.86 * Argentine peso's rate between brokerages 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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