Reuters: US Dollar Report: EMERGING MARKETS-Brazil real hits 2-month low, peso sinks

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EMERGING MARKETS-Brazil real hits 2-month low, peso sinks Nov 6th 2013, 00:51 Tweet Share this Email Print Reprints Related Topics Currencies » Bonds News » Bonds » Markets » Tue Nov 5, 2013 7:51pm EST MEXICO CITY, Nov 5 (Reuters) - Brazil's real slumped to a 2-month low on Tuesday and Mexico's peso sank to its weakest in more than three weeks on bets that upcoming U.S. economic data may encourage the Federal Reserve to withdrawal monetary stimulus soon. U.S. service sector data on Tuesday showed faster growth than expected in October, feeding speculation that the Fed may start winding down its bond-buying program this year. Latin American currencies have weakened since last week amid signs of more vigorous U.S. growth. A strong U.S. jobs report for October on Friday could deepen bets the Fed will move soon. Fed stimulus has kept yields on U.S. Treasuries low, driving investors to seek higher returns in emerging markets. Reduction of the Fed's stimulus is expected to drain much of the tide of investment that rolled into emerging markets. * The Brazilian real slid 2 percent to 2.2887 per dollar, its weakest close since Sept. 9. * Traders speculated that the Brazilian central bank, in an attempt to cushion the real's losses, could step up its market intervention by offering to roll over currency swaps that mature in the beginning of December. * The Mexican peso lost nearly 1.3 percent to 13.16 per dollar, its weakest level since Oct. 10. * Higher taxes next year are likely to have little impact on inflation, which is seen drifting slightly higher to around 3.5 percent next year, central bank chief Agustin Carstens said on Tuesday. * Tame price pressures are seen allowing Mexico's central bank to hold its key rate at a record low of 3.5 percent well into next year in order to support sluggish growth. Latin America FX prices at 2345 GMT: Currencies daily % YTD % change change Latest Brazil real 2.2887 -1.97 -10.87 Mexico peso 13.16 -1.25 -2.25 Chile peso 515.7000 -0.56 -7.17 Colombia peso 1921.6500 -0.95 -8.10 Peru sol 2.7800 0.00 -8.24 Argentina peso 5.9525 -0.17 -17.47 Argentina peso 9.7900 0.92 -30.75 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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