Reuters: US Dollar Report: EMERGING MARKETS-Brazil leads Latam currencies down on Fed fears

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EMERGING MARKETS-Brazil leads Latam currencies down on Fed fears Oct 31st 2013, 21:43 Tweet Share this Email Print Reprints Related Topics Stocks » Currencies » Bonds News » Bonds » Markets » Thu Oct 31, 2013 5:43pm EDT RIO DE JANEIRO, Oct 31 (Reuters) - Brazil's real weakened by the most in over two months on Thursday, leading Latin American currencies down as recent U.S. economic data fueled fears that the Federal Reserve may start winding down its stimulus program later this year. The Brazilian real shed nearly 2 percent, as investors betting on the currency's weakening gained the upper hand during the settlement of an official month-end exchange rate known as Ptax, a reference for contracts in Brazil. Concerns about an early withdrawal of U.S. stimulus gained steam on Wednesday after some traders interpreted the Fed's latest policy statement, which said downside risks to the economy had lessened, as slightly more hawkish. Thursday's economic data, including a surprisingly strong report on U.S. Midwest business activity, added to concerns. The Fed's bond-buying program currently injects $85 billion a month into the U.S. economy, and some of those funds often make their way into higher-yielding emerging markets. * The Brazilian real lost 1.93 percent to 2.2336 per dollar, its biggest decline since Aug. 21 and the weakest level since late September. * A report showed Brazil's primary budget deficit swelled to its biggest in nearly five years in September. Analysts saw the data as a sign of heightened government spending that could fuel inflation and force the central bank to further tighten monetary policy. * The Mexican peso slid 0.73 percent to 13.019 per dollar, beyond the 13 per dollar level that has proven to be a key resistance level during the past three weeks. Latin America FX prices at 2113 GMT: Currencies daily % YTD % change change Latest Brazil real 2.2336 -1.93 -8.67 Mexico peso 13.019 -0.73 -1.19 Chile peso 506.9000 0.36 -5.56 Colombia peso 1892.3500 -0.49 -6.68 Peru sol 2.7720 -0.51 -7.97 Argentina peso (interbank) 5.9100 -0.08 -16.88 Argentina peso (parallel) 9.8800 0.51 -31.38 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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