EMERGING MARKETS-Brazil leads Latam currencies lower on Fed worries

Reuters

RIO DE JANEIRO, Nov 1 (Reuters) - The Brazilian real led

Latin American currencies down on Friday as investors tested new

technical levels after the currency sold off about 2 percent in

the previous session on fears of an early withdrawal of U.S.

stimulus.

Concerns that the U.S. Federal Reserve may start winding

down its bond-buying program this year, potentially reducing the

flow of dollars seeking higher yields in emerging markets, have

caused Latin American currencies to weaken in the past few days.

Those fears were on the rise again on Friday after data

showed the U.S. manufacturing sector expanded at its fastest

pace in 2-1/2 years last month.

* The Brazilian real weakened to as much as

2.2593 per dollar, briefly crossing its 100-day simple moving

average, considered by analysts as a key resistance level for

the currency.

* The real had already weakened nearly 2 percent on

Thursday, breaking key resistance marks that encouraged

investors to test weaker levels for the currency.

* Traders expect the real to strengthen back to the level of

2.2 per dollar in coming days, however, as dollars as foreign

oil companies send dollars into the country to pay for a signing

bonus related to a concession to explore the offshore oil area

of Libra.

* In an apparent attempt to cushion the real's losses,

central bank monetary policy director Aldo Luis Mendes stressed

that the bank's current intervention program in foreign exchange

markets has no set date to end.

* The Mexican peso slid 0.3 percent to 13.0550 per

dollar, its weakest level in three weeks, also weighed by data

showing the country's factories remained stagnant in October

despite recent interest-rate cuts by the central bank.

Latin America FX prices at 1505 GMT:

Currencies daily % YTD %

change change

Latest

Brazil real 2.2467 -0.58 -9.20

Mexico peso 13.0550 -0.26 -1.46

Chile peso 506.9000 0.36 -5.56

Colombia peso 1899.4000 -0.37 -7.02

Peru sol 2.7720 -0.51 -7.97

Argentina peso 5.9175 -0.08 -16.98

Argentina peso 9.8600 0.61 -31.24

View Comments