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Brazil's real pauses after rally, Argentine peso hit by Moody's revision


Reuters


By Sruthi Shankar

July 15 (Reuters) - Most Latin American currencies weakened on Monday, halting the Brazilian real's recent run-up as investors looked for progress in the government's pension reform bill, while the Argentine peso was hit hard by Moody's outlook cut.

The real fell about 0.5% after posting its strongest weekly gain since late May, while Sao Paulo-listed shares retreated from record highs made last week after Brazil's lower house of Congress approved the main text of the bill.

"Our base case is despite the second floor vote being delayed until 6 August, the reform is on track to be approved by the Lower House by a large majority," Wilson Ferrarezi, economist at TS Lombard, said in a note.

A central bank indicator showed economic activity in Brazil rose in May, the first increase this year and an indication that the country may avoid slipping back into recession.

The Mexican , Chilean and Colombian pesos made tepid moves against the dollar which advanced in thin trading.

The Argentine peso slumped 2% to its weakest level in over a week after ratings agency Moody's changed the economy's outlook to negative from stable over the weekend, citing rising uncertainty about economic policy and risk of additional "damaging currency shocks."

Moody's decision comes a little more than three months before the country's elections in which President Mauricio Macri, seeking a second term, is being challenged by Alberto Fernandez, who has former populist president Cristina Fernandez de Kirchner on his ticket.

Key Latin American stock indexes and currencies at 1956 GMT

Stock indexes

Latest

daily % change

MSCI Emerging Markets

1057.33

0.61

MSCI LatAm

2935.50

-0.16

Brazil Bovespa

103717.50

-0.18

Mexico IPC

43094.46

1.05

Chile IPSA <.SPIPSA>

5069.95

0.03

Argentina MerVal

41348.79

-3.28

Colombia IGBC

13016.77

-0.12

Currencies

Latest

daily % change

Brazil real

3.7560

-0.50

Mexico peso

18.9846

-0.03

Chile peso

680.5

-0.15

Colombia peso

3188.15

0.08

Peru sol

3.283

0.00

Argentina peso (interbank)

42.3800

-1.83






This article appears in: Politics , Stocks , World Markets



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