EMERGING MARKETS-Brazil’s real drops to 3 per dollar on fiscal data, U.S. outlook

Thu Apr 30, 2015 2:18 pm EDT

EMERGING MARKETS-Brazil’s real drops to 3 per dollar on fiscal data, U.S. outlook

SAO PAULO, April 30

(Reuters) – The Brazilian real

weakened sharply on Thursday following

disappointing government fiscal results and strong labor market

data in the United States.

Other Latin American currencies followed suit, but more

modestly, while the region’s stock markets were little-changed.

The Brazilian government on Thursday reported its smallest

primary budget surplus for the month of March in five years,

calling into question its ability to meet the year’s fiscal goal

and restore investor confidence.

Concerns over a potential downgrade of Brazil’s sovereign

credit rating due to poor fiscal management have weighed on the

outlook for local securities.

The real fell back to the 3-per-dollar mark after nearly a

week trading on the stronger side of the closely watched level.

Traders said the currency’s loss was also driven by data on

Thursday that showed the number of Americans filing new claims

for jobless benefits tumbled to a 15-year low last week.

Strong U.S. data tends to increase investor bets that U.S.

interest rates will rise sooner rather than later, making

higher-yielding, but riskier, Latin American assets less

appealing.

Other currencies in the region including the Mexican and

Chilean pesos  weakened less sharply.

Stock markets were mostly calm, with Brazil’s Bovespa index

making up for part of the previous session’s losses.

Shares of retailer Lojas Renner SA jumped nearly

9 percent after the clothing retailer posted

stronger-than-expected quarterly earnings.

Key Latin American stock indexes and currencies at 1751 GMT:

Stock indexes                           daily %     YTD %

Latest       change    change

MSCI Emerging Markets         1046.13     -1.26     10.79

MSCI LatAm                     2677.8     -1.73      -0.1

Brazil Bovespa               55656.33       0.6     11.30

Mexico IPC                   44688.01     -0.57      3.57

Chile IPSA                    4050.71     -0.11      5.19

Chile IGPA                   19653.97     -0.01      4.15

Argentina MerVal            12166.649     -0.14     41.82

Colombia IGBC                10775.46      0.03     -7.38

Peru IGRA                     13321.6      0.63     -9.95

Venezuela IBC                 5768.13      0.72    110.78

Currencies                              daily %     YTD %

change    change

Latest

Brazil real                    3.0085     -1.73    -21.66

Mexico peso                    15.375     -0.92    -15.25

Chile peso                      611.5     -0.57    -13.97

Colombia peso                 2382.54     -0.32    -18.91

Peru sol                       3.1291     -0.29    -10.74

Argentina peso                 8.9050     -0.03    -27.09

(interbank)

Argentina peso                  12.65      0.63    -20.95

(parallel)