Reuters: US Dollar Report: RPT-EMERGING MARKETS-Latam currencies lower; Mexico peso hit by rate cut fears

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

RPT-EMERGING MARKETS-Latam currencies lower; Mexico peso hit by rate cut fears Jan 25th 2013, 21:40 Tweet Share this Email Print Fri Jan 25, 2013 4:40pm EST * Mexico peso falls 0.4 pct to lowest level in 2 weeks * Chile peso drops with copper prices, intervention fears * Brazil real closes flat due to Sao Paulo holiday By Walter Brandimarte RIO DE JANEIRO, Jan 25 (Reuters) - The Mexican peso led Latin American currencies lower on Friday as investors, fearing a possible interest rate cut by the country's central bank, pocketed some of the currency's recent gains. In Brazil, the real closed flat at 2.0305 per dollar in an extremely thin market due to a holiday in Sao Paulo, the country's financial center. Regional currency losses were exacerbated by the peso's fragile technical position on the Chicago exchange, where investors have placed large bets for a stronger Mexican currency. Analysts say such bets could quickly reverse, prompting the peso to sell off. The peso dropped 0.4 percent to trade at 12.698 per dollar, after touching its weakest level in over two weeks. It has lost around 1 percent since last Friday, when the Mexican central bank said it could ease its monetary policy if inflation continues to cool and the economy loses steam. Lower rates could reduce the allure of peso-denominated assets. The central bank's warning represented an abrupt reversal from its previous threat to raise interest rates, leaving some investors wondering whether policymakers were actually more concerned about the strength of the currency. "The central bank's about face, coming as it did after a bout of peso strength, is likely to be viewed by many as a first sign of a possible policy response if the peso gains further ground," Morgan Stanley's analyst Luis Arcentales wrote in a research note. Elsewhere in Latin America, the Chilean peso lost 0.3 percent to 471.80 per dollar, pressured by lower prices of copper, Chile's top export. Fears that Chilean policymakers may intervene in the market to curb the currency's strength also weighed on the peso, which has gained about 1.5 percent since the beginning of the year. Latin American FX prices at 1910 GMT: Currencies Daily YTD pct pct change Latest change Brazil real 2.0305 0.00 0.47 Mexico peso 12.6980 -0.45 1.31 Chile peso 471.8000 -0.34 1.46 Colombia peso 1779.5000 -0.01 -0.76 Peru sol 2.5580 -0.12 -0.27 Argentina peso 4.9650 -0.05 -1.06 Argentina peso 7.6000 -0.53 -10.79 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