Reuters: US Dollar Report: EMERGING MARKETS-Latam currencies gain on U.S. stimulus hopes

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-Latam currencies gain on U.S. stimulus hopes Jul 18th 2012, 17:03 Tweet Share this Email Print Wed Jul 18, 2012 1:03pm EDT By Walter Brandimarte RIO DE JANEIRO, July 18 (Reuters) - Most Latin American currencies gained on Wednesday as investors increased bets on additional monetary stimulus by the U.S. Federal Reserve, a move that often boosts dollar flows into emerging economies. The Brazilian real was little changed from Tuesday's close, however, as investors awaited the release on Thursday of minutes of the central bank's latest monetary policy meeting for more clarity on interest-rate strategy this year. The Mexican peso and the Chilean peso gained 0.3 percent and 0.5 percent, respectively, as key U.S. stock indexes firmed, with investors hoping the Fed would eventually deploy a third round of its bond-buying program to lower financing costs and support the economy. Expectations of additional stimulus grew as leading U.S. corporations such as Bank of America and Honeywell forecast a weakening economy will force them to further cut costs in coming quarters. The dimming U.S. economic outlook brought a different light to the words of Fed Chairman Ben Bernanke, who repeated in congressional testimony on Tuesday and Wednesday that the bank could take additional action if it concludes the economy is not making sufficient progress on job creation. "Bernanke offered a repeat statement as to the Fed's willingness to act if faced with a greater economic slowdown, but refrained specifically from offering any additional signs of quantitative easing," said Enrique Alvarez, head of strategy of IDEAglobal in New York. "After mulling the lack of any new signs in this sense, the markets decided that Bernanke had in fact offered enough evidence of more Fed action to come." REAL STUCK IN NARROW RANGE The Brazilian real edged up 0.2 percent to 2.0176 per U.S. dollar, however, as investors had little incentive to take the currency out of the narrow range it has traded in for the past two weeks under the threat of central bank intervention. "The currency market is stuck within this range of 2.00-2.10 and investors have no reason to trade here, as you can't make any money like that," said Jankiel Santos, chief economist at BES Investimento in Sao Paulo. In the past few weeks, the Brazilian central bank has intervened heavily whenever the real weakens to near 2.1 per dollar. On the other hand, it has also said that a currency stronger than 2 per greenback would hurt exporters. Uncertainty on whether the Brazilian central bank would resort to even lower interest rates and a weaker currency to support the economy this year has also kept investors cautious. Brazil last week cut its base Selic rate to an all-time low of 8 percent, and minutes of the bank's latest meeting are expected to shed light on how much lower rates may go this year. Latin American FX prices from Reuters at 1650 GMT: Currencies daily % YTD % change change Latest Brazil real 2.0184 0.15 -7.43 Mexico peso 13.1099 0.34 6.56 Argentina peso* 6.6500 -0.75 -28.87 Chile peso 487.2000 0.53 6.59 Colombia peso 1,776.2000 0.24 9.13 Peru sol 2.6190 0.04 2.98 * Argentine peso's rate between brokerages Tweet this Link this Share this Digg this Email Reprints Comments (0) Be the first to comment on reuters.com. Add yours using the box above.

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