*
Brazil's IGP-10 price index falls 0.58% in April
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Shares in Brazil's 3R fall after capital increase approved
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Peru's GDP declines 0.63% in Feb, beats expectations
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Latam stocks up 0.4%
(Adds comments, updates prices throughout)
By Bansari Mayur Kamdar
April 17 (Reuters) - Most Latin American currencies fell
on Monday after the dollar bounced as traders eyed another
interest rate hike from the U.S. Federal Reserve, while Peru's
sol inched up on better-than-expected economic activity data.
The sol gained 0.2% against the greenback, after
February's economic activity data beat estimates of a bigger
fall.
Peru's GDP shrunk 0.63% in February compared with the same month last year, while analysts were expecting a 0.90% decline. Its economy began to contract in January hurt by nationwide anti-government protests.
Chile's peso fell 0.5% against a firmer dollar. The dollar index , which measures the currency against six peers, rose 0.5%, recovering from a one-year low hit in previous session, after a barrage of mixed U.S. economic data bolstered expectations of another Fed hike in May. "One of the dynamics emerging market central bankers are dealing with right now is a sign that even the Fed isn't done hiking yet," said Rachel Ziemba, founder at Ziemba Insights.
"I'm not saying all EM countries have to keep hiking because the Fed is hiking, it does put more pressure in that way." Brazil's real dipped 0.3% against the dollar after central bank data showed its economic activity fell in January, highlighting the trend of economic slowdown amid high borrowing costs.
Separately, data found inflation in Brazil as measured by the IGP-10 price index fell 0.58% in April, compared to a 0.05% gain in March. The real was still on track for sharp monthly gains and among the top performing EM currencies in April. "The real yield in Brazil is very high, inflation has come down fast and the central bank has not yet reacted to the policy rate that is very high relative to the levels of inflation," said David Austerweil, deputy portfolio manager for Emerging Markets Fixed Income at VanEck. Colombia's peso snapped its 10-day winning streak against the dollar, slipping 0.4%, while the Mexican peso eased 0.2%.
MSCI's index for Latin American stocks edged 0.4% higher. Brazil's Bovespa index edged down as utility shares weighed. Adding to losses, Brazilian oil firm 3R Petroleum Oleo e Gas SA dropped some 13% after it announced its board had approved a capital increase of up to 900 million reais ($183.36 million) through the issue of new shares. Petrobras said it will cut natural gas prices by an average 8.1% starting May 1 when compared with the February-April quarter. Shares of the Brazilian state-run oil company added 1.5%.
Key Latin American stock indexes and currencies at 1918 GMT:
Stock indexes Latest Daily
%
change
MSCI Emerging Markets 1002.80 0.23
MSCI LatAm 2296.50 0.38
Brazil Bovespa 105773.0 -0.48
7
Mexico IPC 54759.77 0.55
Chile IPSA 5473.33 1.04
Argentina MerVal 280501.5 1.735
1
Colombia COLCAP 1254.36 0.09
Currencies Latest Daily % change Brazil real 4.9310 -0.35 Mexico peso 18.0336 -0.21 Chile peso 798.8 -0.39 Colombia peso 4430.5 -0.43 Peru sol 3.7774 -0.41 Argentina peso (interbank) 216.3700 -0.58 Argentina peso (parallel) 404 -0.99
(Reporting by Bansari Mayur Kamdar, Shreyashi Sanyal and Shashwat Chauhan in Bengaluru, Editing by Angus MacSwan and Alistair Bell)
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