EMERGING MARKETS-Mexican peso leads losses in Latam FX on U.S.-China trade standoff

EMERGING MARKETS-Mexican peso leads losses in Latam FX on U.S.-China trade standoff

* Trade deal may not be completed this year – sources * U.S. bill on Hong Kong human rights angers China * Mexican peso hits 6-week low (Updates prices; adds details, quote) By Medha Singh Nov 20 (Reuters) – Latin American assets moved lower on Wednesday as investors fled risky bets after a report that an initial trade deal between United States and China may not be completed this year. The tariff-sensitive Mexican peso hit its weakest level in six weeks against a steady dollar. Markets in Brazil, the region’s biggest economy, remained shut for a holiday. Completion of a “phase one” U.S.-China trade deal could slide into next year, trade experts and people close to the White House told Reuters, as Beijing presses for more extensive tariff rollbacks, and the Trump administration counters with heightened demands of its own. This comes ahead of the next round of U.S. tariffs on Chinese imports, including holiday gift items like electronics and Christmas decorations, due on Dec. 15. “The hope has been in the market that a phase one deal would be done before that,” said Scott Ladner, chief investment officer at Horizon Investments in Charlotte, North Carolina. “It brings into the realm of probability that those tariffs would come into effect. That’s something the market is unprepared for.” The report added to jitters after the U.S. Senate passed a bill meant to protect human rights in Hong Kong, which drew China’s criticism. Emerging markets assets have broadly risen this quarter on hopes that the world’s top two economies will strike a trade deal to end a damaging tariff war. Chilean peso dropped 0.8% as signs of civil unrest in the country showed no signs of abating. The peso has dropped more than 10% since Oct. 21 when widespread protests against social inequality in the country turned violent. The increasing uncertainty in Chile will impact “economic growth next year but we are far away for a serious questioning of the Chilean model which was so successful in the last few decades,” said Luiz Ribeiro, head of Latin American equities at DWS Group. Stock in the region were also mostly lower with Mexico’s IPC and Chile’s IPSA down. Bucking the trend, Argentina’s Merval rose 2.8%. Key Latin American stock indexes and currencies at 1900 GMT: Stock indexes daily % change Latest MSCI Emerging Markets 1051.43 -0.54 MSCI LatAm 2659.66 0.07 Brazil Bovespa – – Mexico IPC 43539.65 -0.14 Chile IPSA 4786.34 -0.12 Argentina MerVal 33319.57 3.308 Currencies daily % change Latest Brazil real – – Mexico peso 19.4858 -0.77 Chile peso 792.6 -0.71 Colombia peso 3441.1 -0.12 Peru sol 3.382 -0.18 Argentina peso 59.7150 -0.03 (interbank) (Reporting by Medha Singh in Bengaluru, additional reporting by Sinead Carew in New York)


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