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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 0.5%, stocks add 0.2%
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 0.6% 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. 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 to the news, 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 to 11.00%, above market forecasts, citing a complex inflation scenario and suggesting future hikes would be smaller. The Peruvian sol edged 0.2% up after Peru's central bank on Thursday maintained its benchmark interest rate at 7.75%. The MSCI's index for Latin American currencies added 0.5%, while regional stocks inched up 0.2%.
Sao Paulo's stocks , however, were flat
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 0.3% against the dollar. Fitch
said despite healthy liquidity, Colombian corporates faced
challenges ahead.
The Chilean peso edged 0.6% 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 as a widening budget deficit, labor
shortages and a weaker rouble pose inflationary risks.
Key Latin American stock indexes and currencies at 1501 GMT:
Stock indexes Latest Daily %
change
MSCI Emerging Markets 1013.58 -1.07 MSCI LatAm 2199.60 0.16 Brazil Bovespa 108047.25 0.04 Mexico IPC 52772.63 -0.05 Chile IPSA 5343.25 -0.26 Argentina MerVal 249001.14 0.307 Colombia COLCAP 1248.51 0.23 Currencies Latest Daily %
change
Brazil real 5.2567 0.29
Mexico peso 18.6700 0.54 Chile peso 796.1 0.60
Colombia peso 4757.1 -0.31
Peru sol 3.8517 -0.20
Argentina peso 190.5200 -0.16
(interbank) Argentina peso 375 1.07
(parallel) (Reporting by Bansari Mayur Kamdar in Bengaluru; Editing by
Arun Koyyur)
