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Brazil's services activity up 3.1% in Dec, above forecasts
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Mexico Dec industrial production rises 0.7% vs Nov
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Chile c.bank to keep interest rate at 11.25% - poll
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Latam FX up 0.9%, stocks add 0.5%
(Updates prices)
By Bansari Mayur Kamdar
Feb 10 (Reuters) - The Brazilian real rallied on Friday
after data signaled services activity rebounded in December,
while better-than-expected industrial output in Mexico boosted
the peso.
The real gained 1% against the dollar after a survey showed services activity in Latin America's largest economy rose 3.1% in December from the previous month, well above expectations and reached the highest levels to date. Also helping the real, Brazilian Institutional Relations Minister Alexandre Padilha said on Thursday he was unaware of any discussion within the government about raising the inflation target despite media reports that the move was under consideration. The real had weakened sharply in the previous session amid growing tensions between President Luiz Inacio Lula da Silva and the central bank. "Brazil, which had a very aggressive tightening cycle, is now beginning to see some disinflation, which would be very bullish for rates if it wasn't for the government and its actions, which have become an obstacle for lower rates," said Francesc Balcells, chief investment officer for EM debt at FIM. Also beating estimates, Mexican industrial output rose 0.7% in December from November, lifting the peso up 0.5% against the dollar. The peso had also rallied in the previous session as the Bank of Mexico increased the benchmark interest rate by 50 basis points, above market forecasts. The Peruvian sol rose 0.6% after Peru's central bank on Thursday maintained its benchmark interest rate at 7.75%. The MSCI's index for Latin American currencies added 0.9% while broader emerging market (EM) currencies fell 0.3%.
Latam stocks gained 0.5%, but were on track for their second straight week in the red. Sao Paulo's stocks fell 0.2%. Brazilian bank Banco Bradesco SA dropped 7.3% after the bank reported a 75% drop in fourth-quarter net income and sharply increased its provisions for loan losses. Colombia's peso fell 0.6% against the dollar. The Chilean peso edged 0.5% up against the greenback after minutes from Central Bank of Chile's monetary policy meeting. "Our reading of the minutes is slightly dovish with one MPC member entertaining the possibility of a small cut and extensive debate on the (dis)inflationary impact of the recent CLP appreciation," said economists at Goldman Sachs in a note. The Andean nation is expected to keep its benchmark interest rate unchanged at 11.25% at its next monetary policy meeting in April, a central bank poll of analysts suggested. Elsewhere in emerging markets, Russia's central bank held its key interest rate at 7.5%, but suggested that it may have to hike rates this year. Moody's downgraded the ratings outlook for some Adani Group companies on Friday, while MSCI said it would cut the weightings of some in its stock indexes, the latest blows for the Indian conglomerate plunged into crisis by a short-seller's report. Key Latin American stock indexes and currencies a 1920 GMT: Stock indexes Latest Daily % change MSCI Emerging Markets 1013.35 -1.09 MSCI LatAm 2206.90 0.5 Brazil Bovespa 107825.53 -0.17 Mexico IPC 52334.54 -0.88 Chile IPSA 5391.83 0.65 Argentina MerVal 248172.30 -0.027 Colombia COLCAP 1248.26 0.21 Currencies Latest Daily % change Brazil real 5.2167 1.06 Mexico peso 18.6769 0.50 Chile peso 796.9 0.50 Colombia peso 4769.59 -0.57 Peru sol 3.839 0.13 Argentina peso 190.5100 -0.16 (interbank) Argentina peso 373 1.61 (parallel) (Reporting by Bansari Mayur Kamdar and Amruta Khandekar in Bengaluru; Editing by Arun Koyyur and Andrea Ricci)
@BansariKamdar;))