EMERGING MARKETS-Latam currencies hit by strong dollar; Brazil's real extends fall

Shreyashi Sanyal


* Dollar boosted by better-than-expected U.S. data

* Hopes of U.S.-China trade truce lift sentiment

* Brazil's real falls for fourth straight day

* Mexican peso struggles for direction

Nov 27 (Reuters) - Major Latin American currencies fell on Wednesday, as the dollar firmed on better-than-expected U.S. economic data and optimism about a U.S.-China trade deal, while the Brazilian real declined for the fourth straight session. U.S. President Donald Trump said on Tuesday Washington and Beijing were in the "final throes" of an interim trade deal, fueling hopes a truce was possible by the end of the year and propelling global stocks to near-record highs. But demand for Latin American currencies has dipped this week, with investors buying into the dollar as the latest clutch of data showed U.S. economic growth picked up slightly in the third quarter, rather than slowing as initially reported. The Brazilian real fell again, even as the country's central bank intervened twice in the previous session to stymie a slump in the currency. The real, which has been battered this month also thanks to a failed oil auction, fell as much as 1.2% to a record low on Tuesday. "What's interesting is that inflation (in Brazil) has in fact remained benign as the real has depreciated (but) that's not likely to last," said Peter Cecchini, global chief market strategist at Cantor Fitzgerald. Most central banks in Latin America have loosened monetary policy this year to support flagging economies, but the latest economic data continues to paint a grim picture. Figures from the Mexican central bank this week showed the economy entered a mild recession during the first half of 2019 and was flat in the third quarter. Mexico's peso struggled for direction, as a report said representatives from the United States, Mexico and Canada will meet on Wednesday to discuss an agreement to replace the North American Free Trade Agreement (NAFTA). The Colombian peso slipped for the fourth day in a row. President Ivan Duque announced changes to his unpopular tax reform proposal on Tuesday, which would cost the government some 3.2 trillion pesos ($931 million). Traders also signaled fairly thin volumes in a quiet session ahead of the U.S. Thanksgiving holiday on Thursday.

Key Latin American stock indexes and currencies at 1505 GMT:

Stock indexes Latest Daily %


MSCI Emerging Markets 1050.97 0.3MSCI LatAm 2620.79 -0.17Brazil Bovespa 106764.77 -0.28Mexico IPC 42953.31 0.24Chile SPIPSA 4592.77 0.65Argentina MerVal 32800.14 2.139Colombia COLCAP 1587.36 -0.6Currencies Latest Daily %


Brazil real 4.2634 -0.58Mexico peso 19.5408 -0.13Chile peso 809.35 -1.49Colombia peso 3502.8 -0.82Peru sol 3.3918 -0.23Argentina peso (interbank) 59.8500 0.20

(Reporting by Shreyashi Sanyal in Bengaluru)