Reuters: US Dollar Report: EMERGING MARKETS-Brazil, Mexico currencies drop on economy concerns

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EMERGING MARKETS-Brazil, Mexico currencies drop on economy concerns May 6th 2013, 17:57 Tweet Share this Email Print Related Topics Currencies » Bonds News » Bonds » Markets » Mon May 6, 2013 1:57pm EDT * Business activity data from China, Europe spur worries * Brazil's balance of payment performance in focus * Mexican peso, Brazilian real drop about 0.2 pct each SAO PAULO, May 6 (Reuters) - The currencies of Brazil and Mexico edged lower on Monday as weak economic data in China and Europe set off a new round of caution over the global economic outlook, tempering the optimism on Friday after the U.S. jobs numbers. Trading volumes were below average as Japanese and UK financial markets were closed for holidays. The Mexican peso dropped 0.25 percent after hitting a three-week high on Friday as reports showed Chinese business growth in April hit its slowest pace since August 2011 and that recession continued to drag on euro zone companies, including in Germany. The Brazilian real lost 0.2 percent against the U.S. dollar. Investors were becoming worried about a deterioration in Brazil's balance of payments, but were unwilling to make strong bets against the real on fears of central bank intervention. "Investors are not sure about the real situation of the Brazilian economy, so they keep trading cautiously," said Reginaldo Gualhardo, a currency desk manager at Treviso brokerage in Sao Paulo. Economic data last week showed Brazil's trade deficit deepened to nearly $1 billion in April, the latest sign of deterioration in the country's balance of payments. In March, Brazil posted its worst current account deficit on record for that month. Despite the poor data, the currency has remained steady as Brazil's central bank has systematically intervened to keep the real around the 2-per-dollar mark, a level that policymakers consider adequate to support exporters without adding to inflation pressure. "Big news will be needed for the currency to move away from current levels," said Jose Carlos Amado, a trader with Renascenca brokerage in Sao Paulo. Latin American FX prices at 1730 GMT: Currencies Daily YTD pct pct change Latest change Brazil real 2.0130 -0.22 1.34 Mexico peso 12.1004 -0.25 6.31 Chile peso 469.3000 0.09 2.00 Colombia peso 1828.6000 0.31 -3.42 Peru sol 2.6160 0.42 -2.48 Argentina peso 5.2050 -0.10 -5.62 Argentina peso 9.8300 0.51 -31.03 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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