Reuters: US Dollar Report: EMERGING MARKETS-Latam currencies drop on profit taking

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EMERGING MARKETS-Latam currencies drop on profit taking Feb 4th 2013, 17:46 Tweet Share this Email Print Related Topics Currencies » Bonds News » Bonds » Markets » Mon Feb 4, 2013 12:46pm EST * Disappointing US data, European jitters trigger profit-taking * Mexico peso down 0.8 pct in overseas trading, erases Friday's rally * Brazilian real little changed for 4th consecutive session By Walter Brandimarte RIO DE JANEIRO, Feb 4 (Reuters) - Latin American currencies weakened on Monday as a combination of disappointing U.S. factory data and brewing political worries in Europe encouraged investors to pocket recent gains in emerging markets and other risky asset classes. The Mexican peso, the most liquid Latin American currency, lost 0.8 percent in overseas trading as Mexican markets were closed for a holiday. Despite its losses, the peso remained nearly 1.5 percent stronger year-to-date after rallying 0.8 percent on Friday on the back of strong manufacturing data in the United States, Mexico's main trading partner. Investors are also watching the results of a government probe to find out whether an explosion on Thursday that killed 33 people at the headquarters of Pemex was an attack or an accident. The peso could suffer if the investigation shows the state-run oil monopoly was the target of an attack, analysts said. Losses in the peso and in other Latin American currencies were mostly a result of a more cautious global environment after U.S. data showed factory orders rose less than expected in December, a possible sign that companies were losing confidence in the strength of the world's largest economy. Global aversion to risk was also fueled by rising political jitters in Europe, including a corruption scandal in Spain and polls showing Italian former Prime Minister Silvio Berlusconi gaining ground ahead of elections this month. The Chilean peso lost 0.3 percent while the Colombian peso was 0.7 percent weaker. "European markets are down on concerns about Spain and U.S. markets are suffering by some weaker-than-expected quarterly results. All of that is weighing on the (Chilean) peso," said Eugenio Cortes, head of forward trading at EuroAmerica. The Brazilian real was little changed for the fourth consecutive session, however, hovering around the level of 1.99 per dollar. Investors took the latest Brazilian central bank interventions in the foreign exchange market as a sign that policymakers want the currency to remain around the mark of 2 per dollar in order to avoid additional inflationary pressures. Latin American FX prices at 1730 GMT: Currencies daily % YTD % change change Latest Brazil real 1.9913 -0.19 2.44 Mexico peso 12.7091 -0.84 1.22 Chile peso 472.9000 -0.34 1.23 Colombia peso 1787.4400 -0.63 -1.20 Peru sol 2.5750 0.04 -0.93 Argentina peso 4.9800 0.15 -1.36 Argentina peso 7.7000 2.86 -11.95 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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