MEXICO CITY, April 17 (Reuters) - The Brazilian real firmed on Monday as the central bank stepped up intervention, while the view that the government will stick to its plans to push a pension overhaul also helped to boost the currency as well as local stocks.
The real firmed 1.35 percent against the dollar to its strongest level in nearly two weeks after the central bank sold $800 million worth of currency swaps, which function like dollar sales to investors for future delivery, to roll over contracts expiring next month.
Should the bank maintain that pace of sales daily until the end of the month, it will fully roll over $6.4 billion worth of swaps set to mature on March 2. The central bank currently holds around $17.7 billion worth of swaps on its balance sheet.
Meanwhile, lawmakers who attended a meeting with Brazilian President Michel Temer on Sunday said he was sticking with his plans to push the pension overhaul through Congress by July.
The proposed pension reform is a cornerstone of Temer's plan to restore fiscal discipline and bolster investor confidence to spark a recovery, but it remains unpopular among Brazilians, many of whom would have to work longer before retirement.
Brazil's benchmark Bovespa stock index jumped 2.5 percent on Monday, the biggest gain among the region's bourses.
Despite the gains in Brazil, escalating tension between the United States and North Korea, depressed investor appetite for higher-yielding, emerging market assets.
A day after a failed missile test by North Korea, U.S. Vice President Mike Pence on Monday warned that recent U.S. military strikes in Syria and Afghanistan show that the resolve of President Donald Trump should not be tested.
The news led other Latin American currencies to seesaw, with the Mexican peso slipping from a five-month peak, though Chile's peso followed copper prices higher.
Key Latin American stock indexes and currencies at 2000 GMT: Stock indexes Latest Daily YTD pct pct change change MSCI Emerging Markets 963.33 0.3 11.38 MSCI LatAm 2,655.15 1.9 11.32 Brazil Bovespa 64,394.78 2.5 6.92 Mexico IPC 49,007.81 0.11 7.37 Chile IPSA 4,860.48 0.04 17.08 Chile IGPA 24,376.56 0.07 17.57 Argentina MerVal 20,723.16 -0.42 22.49 Colombia IGBC 10,174.39 -0.74 0.46 Venezuela IBC 47,329.03 0.64 49.28 Currencies Latest Daily YTD pct pct change change Brazil real 3.1035 1.35 4.69 Mexico peso 18.5090 -0.06 12.08 Chile peso 645.7 0.69 3.87 Colombia peso 2,850.68 0.50 5.29 Peru sol 3.25 0.12 5.05 Argentina peso (interbank) 15.1950 -0.03 4.48 Argentina peso (parallel) 15.86 -1.07 6.05 (Reporting by Anthony Esposito, editing by G Crosse)