Reuters: US Dollar Report: EMERGING MARKETS-Latam currencies mostly gain on Italy, U.S. data

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EMERGING MARKETS-Latam currencies mostly gain on Italy, U.S. data Feb 27th 2013, 20:54 Tweet Share this Email Print Wed Feb 27, 2013 3:54pm EST * Fight over Brazil's month-end Ptax fuels real's gains * Mexico peso recovers as policymaker sees no case for rate cut * Brazil real, Mexico peso each gain 0.6 pct; Chile peso flat By Walter Brandimarte RIO DE JANEIRO, Feb 27 (Reuters) - Latin American currencies rose on Wednesday as a successful debt sale by Italy allayed concerns about the euro zone debt crisis, while the latest U.S. data suggested the world's largest economy was improving. Appetite for currencies in the region increased further after Federal Reserve Chairman Ben Bernanke remained steadfast in the defense of the Fed's stimulus program, which supports dollar inflows into higher-yielding emerging market assets. The Brazilian real closed 0.6 percent higher at 1.9731 per dollar as investors who were positioned to profit from a currency appreciation took the opportunity to push the exchange rate even higher near the end of the month. The move was part of a strategy to influence the month-end fix of the so-called Ptax, a benchmark exchange rate calculated by the central bank that is used in a broad range of contracts, including foreign loans, trade, and derivatives. "The market is shorting dollars, so we have this fight over the Ptax fix because nobody wants to lose money," said Reginaldo Siaca, a manager at Advanced brokerage in Sao Paulo. Adding to the positive tone was U.S. economic data which showed a gauge of planned business spending recorded its largest increase in just over a year in January, while contracts to buy new homes neared a three-year high last month. In Mexico, the peso erased early losses to gain 0.6 percent after a central bank policymaker said he saw "no case" for an interest rate cut, a move that could reduce the appeal of Mexican assets. "Most analysts say they are not sure whether (central bank governor Agustin) Carstens will want to cut interest rates with a divided board," said Pedro Tuesta, an economist with 4Cast consultancy. The Chilean peso ended practically unchanged at 472,80, supported by the success of a closely watched Italian bond sale. The deal lured bidders with yields at their highest auction level since October, calming fears the paper would be difficult to sell given the volatile market environment. The Chilean peso did not rise further because the price of copper, the country's main export product, was curbed by lackluster demand from China, traders said. Latin American FX prices at 2030 GMT: Currencies Daily YTD pct pct change Latest change Brazil real 1.9731 0.60 3.45 Mexico peso 12.7615 0.65 0.80 Chile peso 472.8000 0.08 1.25 Colombia peso 1814.1500 0.21 -2.65 Peru sol 2.5810 0.12 -1.16 Argentina peso 5.0400 -0.05 -2.53 Argentina peso 7.8000 0.26 -13.08 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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