Reuters: US Dollar Report: EMERGING MARKETS-Brazil real eases to 4-year low, Mexico peso flat

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EMERGING MARKETS-Brazil real eases to 4-year low, Mexico peso flat Aug 14th 2013, 20:41 Tweet Share this Email Print Related Topics Currencies » Bonds News » Bonds » Markets » Wed Aug 14, 2013 4:41pm EDT RIO DE JANEIRO, Aug 14 (Reuters) - The Brazilian real on Wednesday dropped to levels not seen in more than four years as investors tested policymakers' tolerance to a weaker currency, while the Mexican peso steadied after three consecutive sessions of losses. Latin American currencies were generally calmer as comments by a senior U.S. Federal Reserve official were interpreted as supporting the continuity of the Fed's bond-buying program, maintaining investors' appetite for emerging market assets. St. Louis Fed president James Bullard said he has been concerned by U.S. low inflation, which does not seem to be heading higher despite the bank's stimulus measures. * The Brazilian real closed at 2.3240 per greenback, its weakest level since the end of March, 2009, leaving investors on watch for a possible central bank intervention. * Brazil's central bank has routinely intervened in the market with the sale of traditional currency swaps, derivative contracts designed to support the real. It has allowed the real to weaken about 1 percent on Tuesday, however, and another 0.6 percent on Wednesday. * "The market is testing the central bank to see if it has abandoned the ship and will allow the real to weaken further," said a trader with a foreign bank in Brazil. * The Mexican peso steadied around 12.73 per dollar after losing about 1 percent during the past three sessions as investors assessed the likely impact of a proposed energy reform over future dollar inflows to the country. * Fitch Ratings considered Mexico's reform proposal positive for the economy but cautioned that tangible benefits will only be seen in the long term. "This is because the reform requires a constitutional amendment and subsequent implementing regulation before contracts can be signed, and the related private investment can begin to flow," the ratings agency said in a statement. Latin American FX prices at 1930 GMT: Currencies Daily YTD pct pct change Latest change Brazil real 2.3240 -0.63 -12.22 Mexico peso 12.7335 0.05 1.03 Chile peso 508.0000 0.45 -5.77 Colombia peso 1890.1000 -0.41 -6.57 Peru sol 2.7960 -0.04 -8.76 Argentina peso 5.5650 -0.04 -11.73 Argentina peso 8.9000 -1.24 -23.82 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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