EMERGING MARKETS-Trade hopes lift Latam currencies, Brazil's real lags

Agamoni Ghosh

Sept 24 (Reuters) - Latin American currencies were mostly higher on Tuesday as confirmation that planned trade talks between the United States and China were on schedule bolstered support for emerging markets, but Brazil's real underperformed its regional peers. U.S. Treasury Secretary Steven Mnuchin said on Monday that trade talks with China would resume next week in Washington, adding the Trump administration had requested Chinese officials cancel a visit to U.S. farming regions. Cancellation of the visit had raised doubts on the course of progress in trade talks between the two nations. Mexico's peso and Colombia's peso led currencies in the region higher, up 0.2% each but Brazil's real shed 0.3% against the dollar. Minutes from the rate meeting of Brazil's central bank last week showed that gradual economic growth and persistently low inflation are likely to pave the way for a further reduction in interest rates. "With a room for rate cuts suggested by recent inflation simulations, the authority seems poised to provide significant additional monetary stimuli ahead," said Mauricio Oreng, senior Brazil strategist at Rabobank. "We look for two more rate cuts of 50bp ahead, with Selic ending the year at 4.50%." The Bovespa fell 0.4% dragged down by shares of financial companies, while Embraer fell 1.6% after workers at the Brazilian planemaker's San Jose plant started a strike that entirely halted production. Mexican stocks slid marginally, while the peso rose 0.2%. Data showed consumer price inflation slowed in the first half of September to its lowest level in three years, increasing the possibility of rate cut. On Thursday, Mexico's central bank is expected to slash its benchmark interest rate by 25 basis points for a second time this year, a Reuters poll showed. Chile's peso flit between negative and positive territory even as prices of copper, the country's top export, ticked up.

Latin American stock indexes and currencies at 14:28 GMT

Stock indexes Latest Daily %


MSCI Emerging Markets 1013.44 -0.18MSCI LatAm 2666.81 -0.57Brazil Bovespa 104189.78 -0.43Mexico IPC 43409.27 -0.22Chile IPSA 5018.15 -0.14Argentina MerVal 28845.31 -0.857Colombia IGBC 12983.50 -0.07Currencies Latest Daily %


Brazil real 4.1731 -0.26Mexico peso 19.4593 0.24Chile peso 722.2 0.09Colombia peso 3436.74 0.18Peru sol 3.3478 0.22Argentina peso (interbank) 56.9500 -0.04

(Reporting by Agamoni Ghosh in Bengaluru; Editing by Andrea Ricci)