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EMERGING MARKETS-Most Latam currencies dip in caution as G20 gets underway

Sruthi Shankar

(Updates to close) June 28 (Reuters) - Most Latin American currencies fell on Friday, with the Brazilian real leading losses, ahead of a high-stakes meeting between U.S. and Chinese leaders over their trade dispute that has roiled financial markets for months. U.S. President Donald Trump said on Friday he hoped for productive talks with Chinese President Xi Jinping, set to be held at the sidelines of a Group of 20 (G20) summit in Osaka, but said he had not made any promises about a reprieve from escalating tariffs. While most traders do not see both sides striking a trade deal, Trump is expected to refrain from imposing new tariffs on Chinese goods. "The broad consensus is that they will agree to resume talks and at best, the U.S. will pledge to hold off from imposing remaining sanctions for now," RBC's global head of FX strategy, Elsa Lignos, wrote in a note. The Brazilian real was down about 0.5%, giving back much of its gains made on Thursday after the government's special congressional pension coordinator Samuel Moreira said there was still time to vote on pension reform in June, even after a committee meeting was canceled on Thursday. The central bank said on Friday Brazil's public finances swung back into the red in May with the primary deficit widening sharply from a year ago, although overall national debt as a share of the economy fell unexpectedly. However, Sao Paulo-listed shares rose 0.2%, with industrial companies leading gains. The Bovespa is trading near record levels after a 14.9% climb so far this year. Other currencies in the region stayed largely flat, with the Mexican peso holding steady after the Bank of Mexico kept rates unchanged on Thursday, as expected. President Andres Manuel Lopez Obrador said on Thursday that

Mexico's state oil company Pemex signed an $8 billion

syndicated loan with more than 20 banks to renew credit lines and refinance liabilities. The peso has been hit by recent credit downgrades for the indebted firm. Mexican stocks fell 0.6%, dragged down by airport operators. Peru's sol ended lower after its central bank intervened in the foreign exchange market by buying $20 million and the Colombian peso also weakened. The Argentine peso closed up 0.4%, but has shed over 11% in the first six months of the year, making it among the worst-performing emerging currencies so far this year as the country faces recession and runaway inflation rates.

Latin American stock indexes and currencies at 1952 GMT

Stock indexes daily %Latest changeMSCI Emerging Markets 1054.67 -0.02MSCI LatAm 2841.18 0.51Brazil Bovespa 100920.09 0.19Mexico IPC 43110.12 -0.48Chile IPSA 5065.77 -0.16Argentina MerVal 41655.86 1.28Colombia IGBC 12606.02 0.04Currencies daily %

change Latest

Brazil real 3.8380 -0.50Mexico peso 19.1873 -0.05Chile peso 676.85 0.36Colombia peso 3211 -0.46Peru sol 3.294 -0.15Argentina peso 42.4500 0.64


(Reporting by Sruthi Shankar in Bengaluru, Editing by Nick Zieminski and Lisa Shumaker)