(Recasts; updates prices, adds market strategist's quote) Dec 21 (Reuters) - Latin American currencies eased on Friday against a resurgent dollar, as weak risk sentiment took its toll on the region, while Latin American stocks joined a decline in global equities. Market participants unwound riskier bets in emerging markets to pile into safer assets as persistent stock market volatility and a possible U.S. government shutdown underpinned weakness among Latin American currencies and supported the dollar.
MSCI's index of Latin American currencies posted a loss of 0.45 percent, on a day when investors bid up the safe-haven Japanese yen. Ricardo Gomes da Silva Filho, an exchange trader at Correparti Corretora, said the recovery in the dollar - which had weakened for two sessions after the U.S. Federal Reserve flagged fewer interest rate hikes for the next two years - was pressuring Brazil's real, which dived 1.6 percent. The Bovespa stocks benchmark, however, rose 0.5 percent. Ari Santos, head of the Bovespa desk at brokerage H.Commcor, pegged the gain on investors snapping up stocks which had sold off earlier in the week. Mining giant Vale SA jumped up 2.1 percent, its biggest one-day gain in three weeks. State-run oil firm Petroleo Brasileiro SA edged 0.1 percent higher but still posted a third straight weekly loss. It remained anchored not far from an over two and a half month closing low clocked on Thursday. Low global oil prices, which are down about 11.2 percent this week and on pace for their worst December performance since 2015, have weighed heavily on stocks of oil majors globally this week. In Brazil's bond market, the surplus yield investors receive 10-year bonds plumbed an over 11-year trough during Friday's session. Rising U.S. rates have drained capital away from emerging markets during 2018, as increasing returns on dollar-denominated assets have reduced the attractiveness of securities in the developing world. Mexico's peso softened 0.3 percent while its main stocks index fell 0.6 percent to snap a three-day winning run. Chilean equities rose 0.2 percent while the peso fell 0.4 percent as prices of key export copper dipped. Colombia's peso softened 0.7 percent, while its stocks edged up 0.2 percent. The country's central bank left borrowing costs stable at 4.25 percent on Friday, unchanged since last April. The decision comes despite data showing annual consumer prices rose 3.27 percent in November, above the bank's ideal 2019 inflation target of 3 percent. Argentina's peso firmed a touch but its benchmark MerVal stock index dropped 2.7 percent.
Key Latin American stock indexes and currencies at 2135 GMT
Stock indexes Latest Daily YTD pct pct change
MSCI Emerging Markets 957.33 -0.26 -17.36 MSCI LatAm 2,521.49 -0.26 -10.84 Brazil Bovespa 85,697.15 0.5 12.17 Mexico IPC 41,468.56 -0.52 -15.98 Chile IPSA 5,063.33 0.2 0.20 Argentina MerVal 28,456.92 -2.69 -5.35 Colombia IGBC 11,013.71 0.16 -3.14 Currencies Latest Daily YTD pct pct change
Brazil real 3.9034 -0.24 -15.12 Mexico peso 19.9504 -0.38 -1.26 Chile peso 692.02 -0.18 -11.18 Colombia peso 3,292 -0.73 -9.42 Peru sol 3.358 -0.27 -3.60 Argentina peso (interbank) 37.9750 0.22 -51.02
(Reporting by Aaron Saldanha in Bengaluru, Additional reporting G Crosse)