Reuters: US Dollar Report: EMERGING MARKETS-Latam FX pressured by U.S. default fears, supported by Yellen

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EMERGING MARKETS-Latam FX pressured by U.S. default fears, supported by Yellen Oct 9th 2013, 16:06 Tweet Share this Email Print Reprints Related Topics Currencies » Bonds News » Bonds » Markets » Wed Oct 9, 2013 12:06pm EDT SAO PAULO, Oct 9 (Reuters) - Latin American currencies erased early gains and weakened on Wednesday afternoon as fears of a possible U.S. debt default sapped investors' appetite for risk. The Brazilian real and the Mexican peso started the session with gains as investors welcomed the expected nomination of Janet Yellen to run the U.S. Federal Reserve. President Barack Obama's choice of Yellen supported the view that the Fed will be extra cautious when unwinding a monetary stimulus plan that has supported investors' appetite for emerging market assets. But the initial market optimism gave way to lingering concerns over the U.S. debt ceiling in the afternoon, when key Wall Street indexes slid into the red. The real fell 0.3 percent while the Chilean peso dropped 0.2 percent. The Mexican peso trimmed gains but still remained 0.2 percent stronger. The U.S. Treasury is expected to exhaust its borrowing capacity by Oct. 17, when it will have only about $30 billion left in cash to honor its obligations. While many investors expect U.S. lawmakers to reach a last-minute agreement to lift the country's debt ceiling, others preferred to be on the sidelines while the U.S. political scenario remains unclear. Latin America FX prices at 1555 GMT: Currencies daily % YTD % change change Latest Brazil real 2.2093 -0.24 -7.66 Mexico peso 13.2095 0.12 -2.61 Chile peso 501.1000 -0.20 -4.47 Colombia peso 1893.3500 -0.18 -6.73 Peru sol 2.7840 -0.25 -8.37 Argentina peso 5.8200 0.04 -15.59 Argentina peso 9.7000 -0.62 -30.10 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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