(Recasts with Mexican peso, updates prices) MEXICO CITY, Jan 11 (Reuters) - The Mexican peso strengthened slightly on Thursday, even as U.S. Treasury Secretary Steven Mnuchin acknowledged that the United States may pull out of the North American Free Trade Agreement (NAFTA). The peso weakened significantly on Wednesday after a Reuters report said Canada increasingly believes that President Donald Trump will soon announce his intention to withdraw from NAFTA.
The move would be a severe setback for Mexico's economy, which depends on exports to the United States. Mexican officials reiterated on Thursday that if Trump began the withdrawal process then Mexico would break off NAFTA negotiations, which are scheduled to resume in January.
Mnuchin's comments did not appear have much impact on the Mexican currency, however, and it gained a wafer-thin 0.02 percent. "This was not seen as a threat by market participants," Banco Base's Gabriela Siller wrote in a report. Except for Argentina's peso, all other major Latin American currencies also rose. Mexico's benchmark S&P/BMV IPC index remained flat, boosted from Wednesday's fall by Cemex, which gained 2.13 percent. Among major equities markets, Brazil's Bovespa index led gains with a 1.49 percent rise, thanks in part to solid foreign capital inflows from investors looking to buy into a nascent consumer recovery in Latin America's largest economy. "With signs of good international liquidity remaining, Brazil can still be attractive to new resources from foreign investors," brokerage Magliano wrote in a note. Among the biggest winners on the Bovespa was private education company Estácio Participações SA, which rose 3.07 percent after analysts issued an outperform rating and raised the target price. Its rival, Kroton Educacional SA, was the biggest loser on the index, slipping 3.63 percent.
Key Latin American stock indexes and currencies at 2100 GMT:
Stock indexes daily % YTD % Latest change change MSCI Emerging Markets 1198.94 0.12 3.37 MSCI LatAm 2968.75 1.49 3.43 Brazil Bovespa 79365.44 1.49 3.88 Mexico IPC 48799.39 0.03 -1.12 Chile IPSA 5717.65 0.7 2.75 Chile IGPA 28755.21 0.65 2.77 Argentina MerVal 32078.22 1.41 6.69 Colombia IGBC 11648.75 -1.36 2.45 Venezuela IBC 1391.08 4.79 10.13 Currencies daily % YTD % change change
Brazil real 3.2122 0.17 3.15 Mexico peso 19.2775 0.02 2.19 Chile peso 605.36 0.50 1.53 Colombia peso 2854.43 1.11 4.47 Peru sol 3.218 0.12 0.59 Argentina peso (interbank) 18.7000 -0.37 -0.53 Argentina peso (parallel) 19.36 -0.21 -0.67
(Reporting by Gram Slattery and Daina Beth Solomon; Editing by Andrew Hay and Tom Brown)