×

EMERGING MARKETS-Mexico peso weakens for third day on Fed, NAFTA jitters

(Updates prices) SAO PAULO, Oct 24 (Reuters) - Mexico's peso on Tuesday weakened for a third straight day to its lowest point in more than five months on lingering uncertainty over U.S. monetary policy and concerns about the nation's trade ties with the United States. Traders have been wary of emerging market assets in recent weeks as lack of clarity over who will next head the Federal Reserve cast doubts over the pace of U.S. interest rate hikes in coming months. Growing bets that current Fed Chair Janet Yellen could be replaced by a more hawkish policymaker have dampened demand for high-yielding assets, which could suffer as U.S. interest rates go up. Among Latin American currencies, the Mexican peso has been under particular stress from talks between the United States, Canada and Mexico on trade. U.S. President Donald Trump's strict demands have fueled concerns that he could make good on threats to scrap the North American Free Trade Agreement (NAFTA), dealing a blow to the highly U.S.-dependent Mexican economy. The Mexican peso on Tuesday slipped 0.58 percent. The Brazilian real fell 0.09 percent, hit by concerns of fading lawmaker support for President Michel Temer's platform of structural reforms. The lower house of Congress is set to vote on Wednesday whether to put Brazil's unpopular center-right president on trial for corruption charges. Traders widely expect him to dodge the accusations, as he did with a first set of charges earlier this year, but a smaller show of support could hurt his reform efforts. "If fewer lawmakers vote to clear Temer, markets will tense up. Not even a watered down version of his pension reform plans would pass Congress in such an unfavorable environment," Advanced brokerage trader Alessandro Faganello said. Brazilian stocks, however, rose 0.98 percent as shares of wood pulpmaker Fibria SA jumped. Fibria posted net income of 743 million reais ($229 million) in the third quarter, up from 32 million reais a year ago, and forecast a tighter pulp market in the second half of the year.

Key Latin American stock indexes and currencies at 1910 GMT:

Stock indexes daily % YTD % Latest change change MSCI Emerging Markets 1112.86 -0.27 29.41 MSCI LatAm 2885.75 -0.18 23.51 Brazil Bovespa 76153.15 0.98 26.44 Mexico IPC 50084.10 1.08 9.73 Chile IPSA 5536.29 -0.43 33.36 Chile IGPA 27748.69 -0.36 33.83 Argentina MerVal 27875.04 0.33 64.77 Colombia IGBC 10904.12 0.23 7.66 Venezuela IBC 663.97 8.36 -97.91 Currencies daily % YTD % change change

Latest

Brazil real 3.2497 -0.09 -0.02 Mexico peso 19.1945 -0.58 8.07 Chile peso 632 0.16 6.12 Colombia peso 2977 -0.85 0.82 Peru sol 3.236 0.09 5.50 Argentina peso 17.4950 -0.46 -9.26

(interbank)

Argentina peso 18.09 -0.11 -7.02

(parallel)

(Reporting by Bruno Federowski; Editing by Meredith Mazzilli)