Reuters: US Dollar Report: EMERGING MARKETS-Brazil rates futures fall on central bank's caution

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EMERGING MARKETS-Brazil rates futures fall on central bank's caution Mar 14th 2013, 13:15 Tweet Share this Email Print Related Topics Currencies » Bonds News » Bonds » Markets » Thu Mar 14, 2013 9:15am EDT * Investors expected clear sign of interest rate hike soon * Mexico peso gains 0.2 pct, Brazil real 0.1 pct lower By Walter Brandimarte RIO DE JANEIRO, March 14 (Reuters) - Brazil's interest-rate futures dropped on Thursday after the central bank said it will be cautious about its next policy steps because of lingering economic uncertainties, disappointing investors who expected a clear sign of an imminent monetary tightening. Meanwhile, most Latin American currencies were flat to stronger as investors awaited the opening of stock markets in the United States for clear direction. U.S. stocks index futures pointed for a higher open on Wall Street. Brazil's interest-rate contract maturing in Jan. 2014 , one of the most traded, dropped 13 basis points to 7.83 percent. Longer-date contracts fell less, causing the yield curve to steepen, on bets that the central bank would have to raise rates more sharply in the future to deal with inflation. In minutes of its latest monetary policy meeting, the central bank said it will be very cautious about its next monetary policy steps as uncertain factors could lift already high inflation. "As the central bank didn't bring any forceful sign that interest rates will go up in April, markets are adjusting to the possibility that they might rise a little later," said Silvio Campos Neto, an economist with Tendencias consultancy in Sao Paulo. In currencies, the Brazilian real was little changed at 1.9708 per dollar, one day after weakening nearly 0.4 percent as global investors flew to the perceived safety of the dollar. The Mexican peso gained for a sixth consecutive day, however, as investors continued to flock into local-denominated assets on hopes that deep structural reforms will boost Mexico's economic prospects. Latin American FX prices at 1240 GMT: Currencies daily % YTD % change change Latest Brazil real 1.9708 -0.07 3.51 Mexico peso 12.4185 0.22 3.59 Chile peso 470.9000 0.02 1.66 Peru sol 2.5940 0.00 -1.66 Argentina peso 5.0775 0.00 -3.25 Argentina peso 7.9000 -0.76 -14.18 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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