*
Dollar rises after report Trump considering emergency
announcement for tariffs
*
Brazil industrial production falls in November
*
Argentina privatizes IMPSA
*
MSCI Latam FX down 0.6%, stocks off 1.6%
(Updates through mid-afternoon trade)
By Lisa Pauline Mattackal and Purvi Agarwal
Jan 8 (Reuters) - Indexes tracking Latin American stocks
and currencies fell on Wednesday, as expectations for
higher-for-longer U.S. interest rates and fresh concerns about
President-elect Donald Trump's tariff plans lifted the dollar
and U.S. Treasury yields.
The MSCI index of Latin American currencies
fell 0.6%, on pace for its worst day in over two weeks.
An index tracking stocks in the region
was down 1.6%, set for its worst day since Dec. 18, when the
U.S. Federal Reserve flagged a more cautious pace of interest
rates year.
CNN reported that U.S. President-elect Donald Trump is
considering declaring a national economic emergency to provide
legal justification for a series of universal tariffs on allies
and adversaries, lifting the already rising dollar index.
Data showed that industrial production in Brazil fell for
the second month in a row in November. Meanwhile, central bank
data showed the country registered its largest dollar net
outflows since 2020 in 2024 as worries about Brazil's fiscal
policies unnerved investors.
The Brazilian real weakened 0.2% against the dollar
on the day. The country's main stock index was down
1.5%, on pace for its worst day in three weeks.
"Sentiment around Brazil's deficit outlook (is) dependent on
robust growth... any growth disappointments, coming from
internal or external shocks, will reignite debt concerns," said
Thierry Wizman, Global FX & Rates Strategist at Macquarie.
EM markets had kicked off the week with gains, as the dollar
weakened on reports that Trump's tariff could be less aggressive
than expected, even after the President-elect refuted the
claims.
They have since retraced much of that move, with a bond
selloff lifting U.S. Treasury yields as tariff worries
compounded expectations of a more cautious pace of rate cuts
from the U.S. Federal Reserve.
Higher U.S. rates dim the appeal of riskier, but
relatively higher-returning emerging market assets.
"To say this is a challenging backdrop for EM equities
may be an understatement, unless there is a specific reason for
a given EM to do well ... this backdrop means money should flow
back to the US," said Geoffrey Dennis, an independent emerging
markets commentator.
Mexico's peso lost 0.5%, while its main stock index
dipped 0.9%. The U.S. is the country's largest trading
partner.
The Colombian peso pared initial losses to rise
0.3%, while the Chilean peso was up 0.4%.
In Argentina, the government
privatized
metallurgical firm IMPSA, marking its first privatization
since libertarian President Javier Milei took office.
HIGHLIGHTS
** Trump will not rule out force to take Panama Canal,
Greenland
** Argentina industrial output dips 1.7% in November
Key Latin American stock indexes and currencies at 1950 GMT:
MSCI Emerging Markets 1070.15 -0.92
MSCI LatAm 1876.77 -1.57
Brazil Bovespa 119402.17 -1.45
Mexico IPC 49660.32 -0.85
Chile IPSA 6762.74 -0.64
Argentina Merval 2785612.4 -1.296
5
Colombia COLCAP 1412.91 -0.44
Brazil real 6.1101 -0.15
Mexico peso 20.4113 -0.5
Chile peso 1000.06 0.41
Colombia peso 4325.68 0.34
Peru sol 3.7725 0.05
Argentina peso (interbank) 1035.5 0
Argentina peso (parallel) 1200 1.25
(Reporting by Purvi Agarwal and Lisa Mattackal in Bengaluru;
editing by Diane Craft)
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