Reuters: US Dollar Report: RPT-EMERGING MARKETS-Latam FX little changed on global uncertainty

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 FX little changed on global uncertainty Feb 28th 2013, 22:13 Tweet Share this Email Print Thu Feb 28, 2013 5:13pm EST * Brazil real consolidates within 1.95-2.0 per dollar range * Mexico peso outlook hinges on next week's rate decision * Brazil real drops 0.2 pct, Mexico peso dips 0.1 pct By Walter Brandimarte RIO DE JANEIRO, Feb 28 (Reuters) - Latin American currencies hovered around the unchanged mark on Thursday as hopes of continued stimulus from the U.S. Federal Reserve offset concerns about Italy's political stalemate and the U.S. economy. The Brazilian real traded around Wednesday's close during most of the session but posted some losses towards the end of the day to close 0.2 percent weaker at 1.9774 per dollar. It finished February with gains of 0.6 percent, though, as investors bet Brazilian policymakers want the currency to remain within a range of 1.95-2.0 per dollar, slightly stronger than it was in the final months of 2012, to help cheapen the cost of imported goods and fight inflation. Even as Brazil recorded dollar outflows of $2.8 billion in the month to Feb. 22, analysts say banks continue to hold large positions in the derivatives market betting on a stronger currency. "We estimate the local banks are short dollars onshore by $11.4 billion. This is close to the record $12.7 billion short reported back in Feb 2011," Flavia Cattan-Naslausky, Latin America currency strategist with RBS, wrote in a research note. "As long as there is a perception that inflation risks maintain a top in the dollar-real exchange rate, local banks should not hurry too much to cover this position." CAUTION Currency investors traded cautiously as they feared the economic consequences of Italy's political instability and before a series of automatic spending cuts come into effect in the United States, potentially hurting the global economy. Hopes that the U.S. Fed will hold on to its bond-buying program, providing a steady source of dollars that often find their way into higher-yielding emerging economies, cushioned the losses. In Mexico, uncertainty over whether the central bank will cut interest rates next week kept currency investors on edge. The Mexican peso barely moved during the session and last traded at 12.7825 per dollar, 0.1 percent weaker than Wednesday's close. In the previous session, the peso recovered part of the losses incurred this week 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. Bets on a possible interest rate cut in Mexico increased recently as the central bank warned it could loosen its monetary policy if inflation and growth continue to slow down. Latin American FX prices at 2150 GMT: Currencies daily % YTD % change change Latest Brazil real 1.9774 -0.20 3.00 Mexico peso 12.7825 -0.12 0.64 Chile peso 472.7000 0.02 1.27 Colombia peso 1812.9000 0.07 -2.59 Peru sol 2.5890 -0.31 -1.47 Argentina peso 5.0450 -0.05 -2.63 Argentina peso 7.8200 0.00 -13.30 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