Latin American FX, stocks set for weekly losses as commodities stall

By Shashwat Chauhan

Feb 23 (Reuters) –Stocks and currencies in resource-rich Latin America slipped on Friday amid a global commodity price fall, setting them up for weekly losses, with currencies of copper producers worst hit.

MSCI’s Latin American currencies .MILA00000CUS gauge was down 0.7% at 10:13 a.m. ET (1513 GMT), a weekly fall of 0.4%.

Brazil’s real BRL= lagged and was down 0.7% to 4.9925 per dollar, touching over two-week lows.

Dipping copper prices weighed on currencies of top producers, with Chile’s peso CLP= down 0.3%, while the Peruvian sol PEN= eased 0.6%.

The Mexican peso MXN= extended losses from the previous session and was down 0.2%.

Data on Thursday showed Mexico’s inflation easing, lifting expectations that its central bank was on track to cut interest rates soon, reinforced by minutes from its last meeting.

However, strategists at Macquarie said that the minutes “don’t point to a hike that soon”.

“Although inflation may decline again, there’s no urgency to ease in view of the economy’s strength in Q1 and the uncertainty posed by the US and Mexico elections.”

Oil-exporter Colombia’s peso COP= fell 0.4% against the dollar as crude oil prices slipped, eying an over 1% fall for the week. O/R

A gauge of EM stocks .MILA00000PUS also fell 1.2%, with heavyweight Brazil’s main stock exchange .BVSP losing 0.4% amid weakness in financial and energy shares.

Brazilian miner Vale’s VALE3.SA shares gained 1.6%, despite reporting a 35% drop in fourth quarter profit.

Stocks in Mexico .MXX were down 0.7%, with bottler and retailer Femsa’s FEMSAUBD.MX stock off 7.4% after it posted a 17.7% year-on-year fall in fourth-quarter net profit.

Shares in Argentina .MERV lost 2.4%, while Colombia’s main stock index .COLCAP dipped 0.5%.

Latin American assets have see-sawed between gains and losses this week as investors tempered their interest rate cut expectations from the U.S. Federal Reserve amid signs of economic resilience in the world’s biggest economy.

HIGHLIGHTS

** Poland to get up to 137 bln euros in funds, says EU chief

** Egypt to announce new investment to boost forex, bonds up

Key Latin American stock indexes and currencies:

Reporting by Shashwat Chauhan in Bengaluru;
Editing by Alexander Smith