Reuters: US Dollar Report: RPT-EMERGING MARKETS-Latam currencies gain modestly after Fed

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RPT-EMERGING MARKETS-Latam currencies gain modestly after Fed Dec 12th 2012, 20:30 Tweet Share this Email Print Related Topics Currencies » Bonds News » Bonds » Markets » Wed Dec 12, 2012 3:30pm EST * Fed pledges to pump more money into the U.S. economy * Chilean peso gains for 7th session to 2-month high * Brazil real gains 0.1 pct, Mexico peso flat By Walter Brandimarte RIO DE JANEIRO, Dec 12 (Reuters) - Latin American currencies rose modestly on Wednesday after the Federal Reserve pledged to inject more money into the U.S. economy, potentially driving up dollar inflows to emerging markets. The Fed's decision to replace an expiring stimulus program with a fresh round of Treasury debt purchases, combined with its pledge to keep interest rates near zero until the jobless rate falls to 6.5 percent, is likely to keep alive investor appetite for emerging-market currencies and stocks. A number of domestic factors curbed gains in Latin American foreign exchange markets, however. In Mexico, a holiday kept local markets closed, leaving the peso to trade nearly unchanged at 12.740 per dollar in overseas trading. In Chile, investors grew increasingly cautious of a possible central bank intervention as the peso gained for a seventh consecutive session. The Chilean currency ended 0.17 percent higher at 474.20 per dollar, its strongest level in two months, also helped by a rise in prices of copper, the country's main export product. Brazil's real ended 0.1 percent stronger at 2.0742 per dollar, also supported by two central bank auctions of dollars with repurchase agreements. The auctions are aimed at providing dollar liquidity at year-end, but also suggest the central bank does not want the real to weaken too much for fear of inflation. "The recent actions and comments from central bank officials show the bank wants a stronger real as they fear inflation pressures," said Sidnei Nehme, a director at NGO brokerage in Sao Paulo. Latin American FX prices at 2015 GMT: Currencies Daily YTD pct pct change Latest change Brazil real 2.0742 0.13 -9.79 Mexico peso 12.7400 -0.03 9.65 Argentina peso* 6.4600 -0.31 -26.78 Chile peso 474.2000 0.17 9.51 Colombia peso 1,794.6500 0.33 8.01 Peru sol 2.5650 0.23 5.15 * 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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