EMERGING MARKETS-Mexico falls on USMCA worries, Wall St recovery buoys some Latam stocks
By Susan Mathew
Sept 25 (Reuters) - Worries that Mexico's trade deal with Canada and the United States may get derailed weighed on Mexico's stocks and the peso currency on Wednesday, while a strong dollar kept most other Latin American currencies pressured.
Mexico's peso MXN= fell 0.5% for its worst day in nearly a month, while the main stock index .MXX extended losses to a third day and touched a two week low.
U.S. President Donald Trump warned that an impeachment inquiry against him could derail congressional approval of the U.S-Mexico-Canada trade agreement (USMCA), a trillion-dollar deal signed by the three nations last year to replace the North American Free Trade Agreement (NAFTA).
Amid calls by leaders of Mexico and Canada urging the United States to ratify the deal, U.S. Trade Representative Robert Lighthizer said he was confident the deal would come up for a vote and pass.
"USMCA is on life support," said James Lucier, an analyst with Capital Alpha Partners. The firm has lowered its estimated likelihood of passage for the USMCA to 30%.
Broader sentiment, meanwhile, remained fragile. MKTS/GLOB
A recovery in U.S. stocks after Trump said a trade deal with China could happen sooner than expected, helped most regional stocks erase early losses and turn positive. .N
After he toughened his trade rhetoric with China on Tuesday, Trump on Wednesday said a deal to end a nearly 15-month trade war with China could happen sooner than people think and that the Chinese were making big agricultural purchases from the United States.
Shares in Argentina .MERV rose for the first time in four sessions, up 1.4%, while those in Brazil .BVSP climbed half a percent.
Currencies in Brazil BRL= and Colombia COP= also eked out gains.
But uncertainty around an impeachment investigation against Trump and persistent fears of slowing global growth saw investors move to safer assets such as the dollar, which in turn pressured most Latin American currencies. FRX/
Those of Chile CLP=, Argentina ARS= and Peru PEN= fell between 0.2% and 0.6%
Key Latin American stock indexes and currencies at 1956 GMT:
Daily % change
MSCI Emerging Markets .MSCIEF
MSCI LatAm .MILA00000PUS
Brazil Bovespa .BVSP
Mexico IPC .MXX
Chile IPSA .SPIPSA
Argentina MerVal .MERV
Colombia IGBC .IGBC
Daily % change
Brazil real BRBY
Mexico peso MXN=D2
Chile peso CLP=CL
Colombia peso COP=
Peru sol PEN=PE
Argentina peso (interbank) ARS=RASL
(Reporting by Susan Mathew in Bengaluru; Editing by Sandra Maler)
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