By Bruno Federowski
SAO PAULO, Aug 30 (Reuters) - The Chilean peso weakened on
Wednesday as stronger-than-expected U.S. economic data and
falling prices of copper drove profit-taking on the currency's
recent rally.
The peso closed 0.9 percent lower, breaking a string of
seven straight daily gains triggered by a rally in futures of
copper, a key export.
The move came in the wake of stronger-than-expected U.S.
second-quarter growth figures, which suggested that momentum
remained solid in the third quarter.
Fast private hiring in August also helped to boost the
greenback, driving expectations for a solid U.S. August non-farm
payrolls figure that could drive the Federal Reserve to raise
interest rates for a third time this year.
Expectations of tighter monetary policy in the United States
initially depressed the Brazilian real, but the currency
rebounded thanks to investor hopes that Congress would approve
key fiscal measures this week.
A congressional committee late on Tuesday approved softened
budget targets for 2017 and 2018, paving the way for a final
plenary vote ahead of an August 31 deadline.
Lower house lawmakers were also set to vote later on
Wednesday on the final amendments to a bill setting a lower
benchmark rate for development bank BNDES that would phase out
loan subsidies in coming years.
"These votes may bring some calm to local markets,"
Correparti brokerage trader Jefferson Rugik said.
Brazil's benchmark Bovespa stock index fell 0.8
percent, tracking global risk-aversion following the strong U.S.
reports. Shares of financial stocks led the losses as traders
booked profits on recent gains.
Key Latin American stock indexes and currencies at 1700 GMT:
Stock indexes Latest Daily YTD pct
pct change
change
MSCI Emerging Markets 1,088.14 0.64 25.39
MSCI LatAm 2,866.71 -0.33 22.88
Brazil Bovespa 70,790.18 -0.76 17.54
Mexico S&P/BVM IPC 51,131.16 -0.36 12.02
Chile IPSA 5,149.07 -0.27 24.03
Chile IGPA 25,702.10 -0.24 23.96
Argentina MerVal 23,453.90 0.04 38.63
Colombia IGBC 10,883.79 -0.44 7.46
Venezuela IBC 225,468.08 6.77 611.14
Currencies Latest Daily YTD pct
pct change
change
Brazil real 3.1591 0.11 2.85
Mexico peso 17.7475 0.53 16.88
Chile peso 630.9 -0.87 6.31
Colombia peso 2,941.25 -0.21 2.05
Peru sol 3.239 0.00 5.40
Argentina peso (interbank) 17.4000 0.00 -8.76
Argentina peso (parallel) 18.22 0.38 -7.68
(Reporting by Bruno Federowski; Editing by Andrew Hay)
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