EMERGING MARKETS-Latam assets slip as rate cut rally fades ahead of Fed meeting minutes

Credit: REUTERS/AGUSTIN MARCARIAN

By Siddarth S

Jan 3 (Reuters) - Most Latin American currencies and stocks slipped on Wednesday and the dollar firmed as risk appetite took a backseat with investors awaiting the minutes of the U.S. Federal Reserve's December meeting for cues on the interest rate path.

The MSCI index tracking Latin American stocks .MILA00000PUS was down 0.2% at 1513 GMT. A basket of regional currencies .MILA00000CUS was down 0.1% against a firm dollar, which gained 0.3%.

The resurgence in the dollar index =USD and benchmark U.S. Treasury yields in recent days sheds some light on fading optimism about early rate cuts as market participants look towards the Fed's minutes for more clarity on the central bank's thinking.

"On the basis of these minutes, some market participants may hope that it will be possible to judge more objectively what the US monetary authorities actually meant: whether the dovish interpretation of Powell's remarks was exaggerated or not," Ulrich Leuchtmann, head of FX and Commodity Research at Commerzbank said in a note.

Among other economic data, U.S. manufacturing activity contracted further in December, though the pace of decline slowed, while job openings fell in November.

Across regional bourses, Brazil's Bovespa index .BVSP was little changed, having declined in the previous session and failed to extend its December rally into the New Year.

Brazil posted a wider-than-expected current account deficit in November but the figure as a proportion of gross domestic product (GDP) continued to decrease, data showed.

Among regional bourses, Mexican shares .MXX were down 0.6%, Chile's IPSA index .SPIPSA slid 1.1% and Colombian shares .COLCAP were up 0.1%.

Argentina's Merval index .MERV gained 1.3%, while presidential spokesperson Manuel Adorni said the country's inflation likely hovered around 30% in December.

Among currencies, Brazilian real BRL= was up 0.2%, Mexican peso MXN= was steady and Chile's peso CLP= nudged 0.4% higher.

Key Latin American stock indexes and currencies at 1513 GMT:

Latest

Daily % change

MSCI Emerging Markets .MSCIEF

1003.13

-1.3

MSCI LatAm .MILA00000PUS

2614.11

-0.19

Brazil Bovespa .BVSP

132641.77

-0.04

Mexico IPC .MXX

56670.75

-0.54

Chile IPSA .SPIPSA

6142.69

-1.09

Argentina MerVal .MERV

941916.71

1.236

Colombia COLCAP .COLCAP

1223.34

0.07

Currencies

Latest

Daily % change

Brazil real BRBY

4.9136

0.03

Mexico peso MXN=D2

17.0380

-0.14

Chile peso CLP=CL

881.2

0.36

Colombia peso COP=

3903.2

-0.21

Peru sol PEN=PE

3.6948

0.41

Argentina peso (interbank) ARS=RASL

811.1000

-0.05

Argentina peso (parallel) ARSB=

985

2.03

(Reporting by Siddarth S in Bengaluru Editing by Mark Potter)

((Siddarth.s@thomsonreuters.com;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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