Reuters: US Dollar Report: EMERGING MARKETS-Mexico, Chile pesos sink after US data

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EMERGING MARKETS-Mexico, Chile pesos sink after US data Jul 5th 2013, 23:05 Tweet Share this Email Print Related Topics Currencies » Bonds News » Bonds » Markets » Fri Jul 5, 2013 7:05pm EDT MEXICO CITY, July 5 (Reuters) - Latin American currencies suffered sharp losses on Friday after stronger-than-expected U.S. jobs data increased bets the Federal Reserve could begin cutting its stimulus measures this year and draw investors out of emerging markets. U.S. data showed employers added 195,000 new jobs in June, fueling expectations the Fed could soon cut back its bond-buying program, which for years has provided a steady source of dollars for investors seeking higher returns in emerging markets. Brazil's real pared steep early losses after the central bank intervened in the market to support the currency and the government said it may lower some import duties to help offset the impact of a sharp depreciation of the currency on inflation. * Brazil's real slipped 0.12 percent, its losses cushioned by a central bank sale of traditional currency swaps, derivative contracts that emulate an injection of dollars in the futures market. * Brazil's real was hammered to a more than 4-year low earlier this week, and the central bank is seen raising its key interest rate for a third straight time next week to keep inflation in check following the currency's tumble, a Reuters poll showed. * Mexico's peso fell the most in more than two weeks, sliding 1.27 percent and crossing the psychologically relevant level of 13 per dollar. * Mexico had been a top destination for global investors seeking higher yields during the recent years of ultra-low U.S interest rates, and analysts say local assets could see even sharper losses as those investors withdraw from riskier assets. * Sharp losses in the Mexican currency have pushed markets to rule out further interest rate cuts this year. Mexico's central bank is seen holding its main rate steady next week. * Chile's peso dropped 1.1 percent as the price of copper, the country's main export product, fell sharply. Latin American FX prices at 2200 GMT: Currencies daily % YTD % change change Latest Brazil real 2.2587 -0.12 -9.68 Mexico peso 13.0750 -1.27 -1.61 Chile peso 507.9000 -1.10 -5.75 Colombia peso 1928.6500 -0.71 -8.43 Peru sol 2.7900 -0.29 -8.57 Argentina peso 5.4025 0.05 -9.07 Argentina peso 7.9200 0.76 -14.39 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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