Reuters: US Dollar Report: EMERGING MARKETS-Latam FX little changed as Fed offers no tapering clues

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EMERGING MARKETS-Latam FX little changed as Fed offers no tapering clues Jul 31st 2013, 19:43 Tweet Share this Email Print Related Topics Currencies » Bonds News » Bonds » Markets » Wed Jul 31, 2013 3:43pm EDT RIO DE JANEIRO, July 31 (Reuters) - Latin American currencies were little changed on Wednesday, trimming most of their early losses, after U.S. policymakers offered no indication that they are about to cut back on stimulus measures that have been supporting appetite for high-yielding assets. Speculation that the U.S. Federal Reserve was about to taper its bond-buying program grew after data released early on the day showed the U.S. economy unexpectedly accelerated in the second quarter. The data showed U.S. gross domestic product expanded at a 1.7 percent annual rate in the second quarter, above the 1 percent rate forecast by economists and up from the first quarter's downwardly revised 1.1 percent expansion pace. The U.S. economic picture was also brightened by a report showing the U.S. private sector added 20,000 jobs in July. Latin American currencies have been selling off in recent weeks on fears that the Fed may soon cut back on its bond-buying program, which for years has provided a steady source of greenbacks seeking higher returns in emerging markets. But, at the end of its two-day meeting, the Fed said the economy is still in need of support and that it will keep buying $85 billion in mortgage and Treasury securities per month. * The Brazilian real was little changed at 2.2797 per dollar after sliding to as much as 2.3022 per greenback, its weakest level since April 1, 2009. * Also supporting the real was strong intervention by the central bank, which called three auctions to sell traditional currency swaps, derivative contracts that provide investors with protection against currency depreciation. * Brazil's central bank sold a total of 45,300 traditional currency swaps in the first two auctions but found no demand for the swaps offered at a third auction. The action suggested policymakers are not willing to allow the real to weaken past 2.3 per dollar. * The Mexican peso dropped 0.1 percent to 12.773 per dollar, after weakening more than 1 percent earlier. * The Chilean peso bucked the trend and ended 0.3 percent stronger before the Fed statement, supported by a rise in the prices of copper, the country's main export product. Latin American FX prices at 1925 GMT Currencies Daily YTD pct pct change Latest change Brazil real 2.2797 -0.03 -10.51 Mexico peso 12.7750 -0.11 0.70 Chile peso 513.4000 0.33 -6.76 Colombia peso 1894.0000 -0.20 -6.76 Peru sol 2.7940 -0.39 -8.70 Argentina peso 5.5050 -0.09 -10.76 Argentina peso 8.6000 0.35 -21.16 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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