Reuters: US Dollar Report: EMERGING MARKETS-Latam currencies strengthen on ECB optimism

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EMERGING MARKETS-Latam currencies strengthen on ECB optimism Sep 5th 2012, 16:22 Tweet Share this Email Print Wed Sep 5, 2012 12:22pm EDT * ECB could reveal details of bond-buying program Thursday * Brazil's real up 0.1 pct; Mexico's peso up 0.6 pct * Colombian peso up after finance minister's statement By Anna Irrera RIO DE JANEIRO, Sept 5 (Reuters) - Latin American currencies gained on Wednesday on reports the European Central Bank will soon reveal details about a bond-buying program aimed at lowering borrowing costs in the debt-ridden region. The ECB may also be ready to waive seniority status on government bonds it buys under the new program. Such a move would mean that investors would not rank lower in any restructuring of euro zone sovereign debt, reducing the risk of private investors. ECB President Mario Draghi is expected to reveal details after the bank's policy meeting on Thursday, sources told Reuters. The Brazilian real gained 0.1 percent, and the Mexican peso strengthened 0.6 percent. "Things have recently shifted for a more positive sentiment, but I don't see the real or Mexican peso moving in a very different way from other currencies in European emerging markets," said Cristian Maggio, senior emerging markets FX strategist at TD Securities in London. Maggio said his team does not expect a dramatic change in current ECB strategy. "The market might be disappointed tomorrow, and if it is Latam currencies will probably start selling off," he said. In a sign of steady appetite for risk in emerging markets, the Brazilian government offered to sell at least $1 billion in dollar-denominated bonds due in 2023. Deutsche Bank and BTG Pactual will manage the deal, the Brazilian Treasury said in a statement. Brazil's real traded at 2.0390 per dollar, stuck within the informal band of 2.0 to 2.1 per dollar in which it has been trading since early July. The central bank has intervened in the currency market whenever the real approaches the edges of that range. The Colombian peso strengthened 0.8 percent to 1,811.20 per dollar, as the country's new finance minister, Mauricio Cardenas, said the government will not employ capital controls to stem the appreciation of the currency. Colombia's peso has been one of the world's top-performing currencies this year, making the country's exports less competitive. Chile's peso gained 0.1 percent to 480.70 per dollar as the price of copper, the country's main export, rose. Benchmark copper on the London Metal exchanged gained 1.4 percent. Latin American FX prices at 1550 GMT: Currencies daily % YTD % change change Latest Brazil real 2.0390 0.12 -8.36 Mexico peso 13.1090 0.58 6.56 Argentina peso* 6.3300 0.32 -25.28 Chile peso 480.7000 0.12 8.03 Colombia peso 1,811.2000 0.76 7.02 Peru sol 2.6110 -0.04 3.29 * 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.

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