EMERGING MARKETS-Mexico falls on USMCA worries, Wall St recovery buoys some Latam stocks

Susan Mathew

Latam stocks@ (Adds details on USMCA, fresh comment, updates prices) Sept 25 (Reuters) - Worries that Mexico's trade deal with Canada and the United States may get derailed weighed on Mexico's stocks and the peso currency on Wednesday, while a strong dollar kept most other Latin American currencies pressured. Mexico's peso fell 0.5% for its worst day in nearly a month, while the main stock index extended losses to a third day and touched a two week low. U.S. President Donald Trump warned that an impeachment inquiry against him could derail congressional approval of the U.S-Mexico-Canada trade agreement (USMCA), a trillion-dollar deal signed by the three nations last year to replace the North American Free Trade Agreement (NAFTA). Amid calls by leaders of Mexico and Canada urging the United States to ratify the deal, U.S. Trade Representative Robert Lighthizer said he was confident the deal would come up for a vote and pass. "USMCA is on life support," said James Lucier, an analyst with Capital Alpha Partners. The firm has lowered its estimated likelihood of passage for the USMCA to 30%. Broader sentiment, meanwhile, remained fragile. A recovery in U.S. stocks after Trump said a trade deal with China could happen sooner than expected, helped most regional stocks erase early losses and turn positive. After he toughened his trade rhetoric with China on Tuesday, Trump on Wednesday said a deal to end a nearly 15-month trade war with China could happen sooner than people think and that the Chinese were making big agricultural purchases from the United States. Shares in Argentina rose for the first time in four sessions, up 1.4%, while those in Brazil climbed half a percent. Currencies in Brazil and Colombia also eked out gains. But uncertainty around an impeachment investigation against Trump and persistent fears of slowing global growth saw investors move to safer assets such as the dollar, which in turn pressured most Latin American currencies. Those of Chile, Argentina and Peru fell between 0.2% and 0.6%

Key Latin American stock indexes and currencies at 1956 GMT:

Stock indexes Latest Daily %


MSCI Emerging Markets 1006.06 -0.52MSCI LatAm 2673.11 0.49Brazil Bovespa 104347.81 0.45Mexico IPC 42917.69 -0.42Chile IPSA 5006.24 0.11Argentina MerVal 28196.91 1.356Colombia IGBC 12912.13 -0.3Currencies Latest Daily %


Brazil real 4.1527 0.39Mexico peso 19.5514 -0.57Chile peso 727.4 -0.60Colombia peso 3428.75 0.15Peru sol 3.35 -0.27Argentina peso 57.0550 -0.27


(Reporting by Susan Mathew in Bengaluru; Editing by Sandra Maler)