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Brazil's industrial output down for third month in a row
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Latam FX down 1.0%, real down 1.3%
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Brazil's Bovespa falls 1.8%, Latam stocks down 1.9%
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There is room to cut interest rates - Brazil's finance
minister
By Bansari Mayur Kamdar April 19 (Reuters) - Brazil's real led losses among Latin American peers on Wednesday after industrial production in the region's largest economy fell for the third consecutive month, while bets on U.S. rate hikes lifted the dollar and pressured other Latin American currencies. The MSCI's index for resource-rich Latin America's currencies weakened 1.0% by 1410 GMT, as the dollar index rose and commodity prices slipped on rising scepticism about U.S. rate cuts later this year. The real shed 1.3%, extending losses for its third straight session, after data showed industrial production fell in February, with the sector still below pre-pandemic levels. "Tight financial conditions and slowing domestic demand are fully offsetting the positive news coming from gradually falling raw material costs, and improving supply conditions," said Andres Abadia, chief Latam economist at Pantheon Macroeconomics. "The near-term outlook remains challenging." Meanwhile, Finance Minister Fernando Haddad said on Tuesday there was scope to cut interest rates after the government formally sent to Congress a proposed fiscal framework to control the trajectory of the public debt. The Latin American stocks index shed 1.9%, with Brazil's stocks down 1.8% and leading regional losses. Vale SA fell 4.0% on reporting a 17.4% fall in the first quarter's iron ore output compared with the previous quarter. Weak iron ore futures after another price warning from China's state planner also weighed on the miner. Colombia's peso shed 1.3% against the greenback as crude prices tumbled on concern potential U.S. interest rate hikes would slow growth and cut oil consumption. The currency of the world's top copper producer Chile eased 0.5% against the dollar, tracking soft copper prices on worries about the impact of higher interest rates on demand.
No.2 copper producer Peru's sol inched 0.1% up and the Mexican peso was flat. Elsewhere in emerging markets, the Hungarian forint dropped 1.8% against the euro after central bank deputy governor Barnabas Virag said the National Bank of Hungary (NBH) could decide to narrow its interest rate corridor next week. India is poised to overtake China as the world's most populous nation, with almost 3 million more people than its neighbour by the middle of this year, United Nations data showed.
Key Latin American stock indexes and currencies:
Stock indexes Latest Daily % change MSCI Emerging Markets 990.10 -1.04 MSCI LatAm 2243.92 -1.94 Brazil Bovespa 104299.76 -1.76 Mexico IPC 54310.24 -0.14 Chile IPSA 5439.63 -0.64 Argentina MerVal 0.00 0 Colombia COLCAP 1253.08 -0.17
Currencies Latest Daily % change Brazil real 5.0484 -1.44 Mexico peso 18.0574 -0.04 Chile peso 799.4 -0.61 Colombia peso 4550.23 -1.43 Peru sol 3.7791 -0.37 Argentina peso (interbank) 217.4000 -0.21 Argentina peso (parallel) 417 0.24 (Reporting by Bansari Mayur Kamdar in Bengaluru; editing by Barbara Lewis)
@BansariKamdar;))