By Bruno Federowski SAO PAULO, Sept 26 (Reuters) - Latin American currencies weakened on Tuesday, weighed down by continuing tensions between North Korea and the United States, as well as the prospect of higher U.S. interest rates.
North Korea's foreign minister said on Monday that comments by U.S. President Donald Trump on Twitter over the weekend counted as a declaration of war and that Pyongyang reserved the right to shoot down U.S. bombers.
The remark spurred demand for safe-haven assets as investors shed emerging-market stocks and currencies. Expectations also mounted that the U.S. Federal Reserve is likely to hike rates by the end of the year, reducing the allure of high-yielding currencies.
The Brazilian real weakened 0.3 percent, in line with similar moves on the Mexican and Chilean pesos .
MSCI's emerging-market equity benchmark fell for a fourth straight day to its lowest in around three weeks. Still, many regional stock indexes bucked the trend, with Brazil's benchmark Bovespa stock index rising 0.6 percent.
Shares of steelmaker Usinas Siderúrgicas de Minas Gerais SA were the biggest gainers, rebounding from a 12.4 percent drop the previous day as China-listed steel futures recovered. Rival steelmakers Gerdau SA and Cia Siderúrgica Nacional SA also rose.
Preferred stock in Cia Energética de Minas Gerais SA rose 1.5 percent after plummeting as much as 4.9 percent in early trading. Analysts said a planned capital increase, despite diluting current shareholders, could help Brazil's No. 3 power utility cut debt.
Key Latin American stock indexes and currencies at 1720 GMT: Stock indexes daily % YTD % change change Latest MSCI Emerging Markets 1083.33 -0.45 26.21 MSCI LatAm 2938.16 -0.17 25.75 Brazil Bovespa 74899.73 0.61 24.36 Mexico S&P/BVM IPC 50413.00 0.09 10.45 Chile IPSA 5268.23 0.12 26.90 Chile IGPA 26298.75 0.09 26.84 Argentina MerVal 25047.18 0 48.05 Colombia IGBC 11047.25 -0.27 9.08 Venezuela IBC 422436.62 0.09 1232.39 Currencies daily % YTD % change change Latest Brazil real 3.1667 -0.32 2.61 Mexico peso 17.9750 -0.31 15.40 Chile peso 632.11 -0.44 6.10 Colombia peso 2927.55 -0.08 2.53 Peru sol 3.266 -0.21 4.53 Argentina peso (interbank) 17.6300 -0.60 -9.95 Argentina peso (parallel) 17.92 0.17 -6.14 (Reporting by Bruno Federowski; Editing by Dan Grebler)