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EMERGING MARKETS-Latam stocks, FX edge higher on virus treatment hopes

Credit: REUTERS/Edgard Garrido

Latin American currencies and stocks edged higher on Monday, on higher commodity prices and optimism over coronavirus treatments, while Brazil's real pared gains on a delay in a new economic package.

By Susan Mathew and Shreyashi Sanyal

Aug 24 (Reuters) - Latin American currencies and stocks edged higher on Monday, on higher commodity prices and optimism over coronavirus treatments, while Brazil's real pared gains on a delay in a new economic package.

Global sentiment got a lift after the U.S. Food and Drug Administration approved the use of blood plasma from recovered COVID-19 patients as a treatment option. A Financial Times report said the U.S. government was considering fast-tracking AstraZeneca's <AZN.L> experimental vaccine. MKTS/GLOB

Main stock indexes in Latin America rose between 0.1% and 0.6%. Argentina's Merval .MERV lost 1.7%.

Eyes will also be on Federal Reserve Chair Jerome Powell's address on Thursday about the U.S. central bank's monetary policy framework review. FRX/

Brazil's real BRBY rose 0.1% from three-month lows, but investors turned cautious after the Brazilian government's move to delay the announcement of a series of measures aimed at propping up the economy, originally due to be revealed on Tuesday.

The World Health Organization said on Friday the coronavirus crisis appears to be leveling off, if not easing, in Brazil, the world's second biggest COVID-19 hot spot, with more than 3.6 million cases registered as of Sunday.

The real has been facing increased pressure from a slew of ministerial resignations and worries about the country's fiscal position.

Mexico's peso MXN=gave up early gains to drop 0.2%. Annual inflation in the first half of August increased to 3.99%, above expectations, to the upper end of the central bank's target range.

The data "will probably prompt the central bank to slow the pace of its easing cycle. But with inflation set to drop back over the coming months, we still think interest rates will fall by more than most expect this year," Capital Economics wrote in a note.

Chile's currency COP= led gains in the region, up 1%, as copper prices rose, while the Colombian peso COP= fell 0.5%. MET/LO/R

Credit rating agency Fitch said it expected Colombia's economy to contract almost 7% in 2020 because of the coronavirus pandemic, adding the Andean country was likely to lose its investment grade.

In Argentina, approval by creditors of its debt restructuring offer is being eyed ahead of a Friday deadline. Investors are now looking for macroeconomic reforms and International Monetary Fund support to regain confidence.

Key Latin American stock indexes and currencies at 1930 GMT:

Stock indexes

Latest

Daily % change

MSCI Emerging Markets .MSCIEF

1108.26

1.5

MSCI LatAm .MILA00000PUS

1962.40

0.53

Brazil Bovespa .BVSP

102011.94

0.48

Mexico IPC .MXX

38062.47

-0.09

Chile IPSA .SPIPSA

3965.48

-0.73

Argentina MerVal .MERV

46626.94

-1.654

Colombia COLCAP .COLCAP

1206.07

1.67

Currencies

Latest

Daily % change

Brazil real BRBY

5.5992

0.11

Mexico peso MXN=D2

22.0220

-0.28

Chile peso CLP=CL

783.2

1.32

Colombia peso COP=

3853.44

-0.52

Peru sol PEN=PE

3.5847

-0.06

Argentina peso (interbank) ARS=RASL

73.7200

-0.19

Argentina peso (parallel) ARSB=

134

2.99

(Reporting by Susan Mathew and Shreyashi Sanyal in Bengaluru Editing by Paul Simao and Richard Chang)

((Shreyashi.Sanyal@thomsonreuters.com; +1 646 223 8780; +91 961 144 3740; Twitter: https://twitter.com/s_shreyashi;))

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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