Reuters: US Dollar Report: EMERGING MARKETS-Latam FX firms as US data suggests steady stimulus

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EMERGING MARKETS-Latam FX firms as US data suggests steady stimulus Oct 22nd 2013, 23:30 Tweet Share this Email Print Reprints Related Topics Currencies » Bonds News » Bonds » Markets » Tue Oct 22, 2013 7:30pm EDT MEXICO CITY, Oct 22 (Reuters) - Latin American currencies gained on Tuesday after slower-than-expected jobs creation in the United States supported the view that the U.S. Fed may maintain its accommodative monetary policy into next year. The Mexican peso led gains in the region, rallying more than 1 percent, after the U.S. Labor Department said employers added 148,000 jobs last month, fewer than the 180,000 posts expected by economists. The U.S. non-farm payrolls data for September was delayed by a 16-day partial shutdown of the U.S. government this month. Latin American currencies had already rallied earlier this month as investors bet the Fed would keep the stimulus in place for longer to offset the negative economic impact of the shutdown. The Fed's stimulus has held down yields on US Treasuries, pushing investors to seek out higher returns in riskier assets, such as emerging market currencies. * The Mexican peso climbed 1.13 percent to 12.8450 per dollar, recovering almost all of the losses incurred on Monday when weak local retail sales data supported bets that the central bank will lower interest rates later this week. * Most analysts expect the Mexican central bank to cut its benchmark interest rate for the second month in a row on Friday, by 25 basis points to 3.5 percent. * A poll on Tuesday from Citigroup-unit Banamex showed an increasing minority of analysts expect Mexico's central bank to opt for a more aggressive 50-basis-point interest rate cut. * Traders said a 25-basis-point cut would not likely hurt the appeal of the peso, but a more aggressive 50-basis-point cut could drive the Mexican currency back toward 13 per dollar. * The Brazilian real firmed 0.51 percent amid speculation the central bank could shift its intervention program if the currency keeps gaining ground. * Some analysts think Brazil's central bank will not roll over all of the $8.9 billion worth of currency swaps that expire early next month. The swaps are a hedge against a possible depreciation of the real. Latin America FX prices at 2300 GMT: Currencies daily % YTD % change change Latest Brazil real 2.1720 0.51 -5.99 Mexico peso 12.8450 1.13 0.15 Chile peso 499.5000 0.46 -4.16 Colombia peso 1879.9000 0.24 -6.06 Peru sol 2.7540 0.73 -7.37 Argentina peso 5.8600 0.04 -16.17 Argentina peso 10.0300 -1.40 -32.40 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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