EMERGING MARKETS-Brazil real drops 1 pct as central bank reduces FX support
By Walter Brandimarte RIO DE JANEIRO, July 3 (Reuters) - The Brazilian real weakened more than 1 percent on Friday, underperforming its Latin American peers after the central bank reduced its forex intervention by slowing the rollover pace of currency swaps.
Also weighing on Latin American markets were fears about the future of Greece in the euro zone. Trading was slow as U.S. markets were closed for the Independence Day holiday.
Brazil's central bank offered on Friday as many as 6,000 swaps, derivatives that provide investors with protection against currency losses, to roll over similar contracts that mature early in August.
In the first two days of the month, the central bank had auctioned as many as 7,100 contracts to roll over the $10.7 billion worth of swaps maturing in August.
If it keeps the new pace until the end of the month, as usual, policymakers will roll over about 60 percent of the expiring swaps.
"The central bank felt comfortable to make such a move after the real recently gained past the level of 3.10 per dollar," Ricardo Gomes da Silva, a trader with Correparti brokerage, said in a note to clients.
The real last traded at 3.1270 per dollar, after closing at 3.095 on Thursday.
In Mexico, the peso was little changed at 15.6746 per dollar after hitting a record low earlier this week due to fears of higher U.S. interest rates and the possibility of a Greek euro zone exit.
Mexican central bank Governor Agustin Carstens said the currency's recent slump was "exaggerated" by global volatility and forecast the peso would bounce back.
Benchmark Latin American stock indexes were also in negative territory as investors awaited a Greek referendum on bailout terms to be held on Sunday, which may determine Greece's future in the euro region.
Key Latin American stock indexes and currencies at 1500 GMT: Stock indexes daily % YTD % change change Latest MSCI Emerging Markets 964.12 -0.76 1.59 MSCI LatAm 2487.48 -1.25 -7.65 Brazil Bovespa 52491.67 -1.16 4.97 Mexico IPC 45019.7 -0.35 4.34 Chile IPSA 3852.88 -0.06 0.05 Chile IGPA 18796.1 -0.06 -0.39 Argentina MerVal 11814.369 0.04 37.71 Colombia IGBC 10225.21 0.19 -12.11 Venezuela IBC 13321.68 0.17 245.23 Currencies daily % YTD % change change Latest Brazil real 3.1310 -1.15 -15.12 Mexico peso 15.7135 -0.33 -6.17 Chile peso 637 -0.39 -4.80 Colombia peso 2645.5 -0.51 -9.73 Peru sol 3.1711 -0.02 -6.06 Argentina peso (interbank) 9.0950 0.03 -5.99 Argentina peso (parallel) 13.42 1.42 4.32 (Additional reporting by Bruno Federowski in Sao Paulo; Editing by Alan Crosby)
