SAO PAULO, Oct 11 (Reuters) - Latin American currencies strengthened on Wednesday as doubts that President Donald Trump would push through his planned tax reforms fueled bets that U.S. interest rates will rise more slowly than expected. Trump's public feud with Tennessee Senator Bob Corker, an influential fellow Republican, raised concern among investors that his push for a tax-code overhaul could be harmed.
Many investors say the tax changes could boost the U.S. economy and generate inflationary pressures, potentially driving the Federal Reserve to accelerate rate-hiking. That would likely reduce the allure of high-yielding assets, weighing on the value of emerging market currencies. Investors will look for further clues over the future path of U.S. monetary policy in the minutes of the Fed's latest policy meeting set for release on Wednesday. "The document will likely reinforce the arguments of the last policy statement, corroborating bets on a December hike," economists at SulAmérica Investimentos wrote in a report. The currencies of Brazil, Chile, Mexico and Colombia firmed between 0.1 and 0.6 percent. Brazil's benchmark Bovespa stock index slipped 0.5 percent as investors booked profits from the previous day's gains, when it hit an all-time high. Shares of for-profit college operator Kroton Educacional SA led the decline after reporting a 1 percent decline in the number of students in its undergraduate programs. Analysts at Banco BTG Pactual highlighted "worrying signs" of increasing dropouts. "2018 is expected to feature a higher level of graduating students, which combined with the worrying retention dynamics seen in 2017 could result in downward revisions to student base forecasts," they wrote.
Key Latin American stock indexes and currencies at 1625 GMT:
Stock indexes daily % YTD % Latest change change MSCI Emerging Markets 1117.33 0.43 29.02 MSCI LatAm 2952.46 -0.44 26.69 Brazil Bovespa 76508.61 -0.51 27.03 Mexico S&P/BVM IPC 50121.96 0.28 9.81 Chile IPSA 5475.46 -0.03 31.89 Chile IGPA 27392.36 -0.03 32.11 Argentina MerVal 27297.96 0.74 61.36 Colombia IGBC 11060.39 -0.05 9.21 Venezuela IBC 532.30 0.22 -98.32 Currencies daily % YTD % change change
Brazil real 3.1669 0.52 2.60 Mexico peso 18.7220 0.60 10.80 Chile peso 626.5 0.40 7.06 Colombia peso 2954.19 0.10 1.60 Peru sol 3.258 0.18 4.79 Argentina peso (interbank) 17.4225 0.01 -8.88 Argentina peso (parallel) 17.8 0.34 -5.51
(Reporting by Bruno Federowski; Editing by James Dalgleish)