Trade tensions, growth worries drive Latam assets to 2019 lows

(Recasts, updates prices, adds quote)
* China unveils retaliatory tariffs on U.S. goods
* Trump tells U.S. companies to seek alternatives to China
* Powell says will "act as appropriate" to support growth
* Mexico domestic growth weaker than estimated in second

By Agamoni Ghosh
Aug 23 (Reuters) - Latin American assets fell on Friday to
their lowest levels so far this year, as another escalation in
the U.S.-China trade war and worries over Mexico's growth kept
investors on the edge.
Beijing imposed additional tariffs on thousands of U.S.
products effective Sept. 1, infuriating U.S. President Donald
Trump who hit back by asking U.S. companies to start looking for
alternatives to their China operations.
The unexpected move in the long drawn-out dispute between
the world's two largest economies renewed fears of a global
slowdown and prompted a global sell-off in riskier assets.
"Even though China's tariffs are smaller than what the U.S.
has imposed, the sudden surprise element of it all should cause
a risk-off to asset markets globally," Iris Pang, economist,
Greater China, ING, said in a note.
Latin American currencies, which fell more
than 1%, were on course to record a fifth consecutive week of
losses with Mexico's peso hitting eight-month lows.
Mexican gross domestic product was unchanged in the second
quarter from the preceding three months, slightly weaker than a
preliminary estimate, showing the economy was even closer to
entering a recession in the first half of 2019 than previously
Other regional currencies like the Brazil's real and
Colombia's peso slid over 1%, despite a weaker dollar.
Federal Reserve chair Jerome Powell, in a much anticipated
speech at an economic symposium at Jackson Hole, said the U.S.
central bank would "act as appropriate" to keep the current
economic expansion on track, but did not offer a clear
indication on future interest rate-cuts.
MSCI's index of Latin American stocks shed
nearly 3% with heavyweight Bovespa index falling more
than 2%. Mexican stocks made the smallest losses.
Argentina's peso, which shed nearly 18% last week,
extended losses to record a sixth straight week of losses.

Key Latin American stock indexes and currencies at 1905 GMT
Stock indexes daily %
Latest change
MSCI Emerging Markets 970.98 -0.48

MSCI LatAm 2511.79 -2.95

Brazil Bovespa 97818.45 -2.19

Mexico IPC 39960.50 -0.46

Chile IPSA 4667.70 -1.5

Argentina MerVal 26933.98 -3

Colombia IGBC 12208.92 -1.28

Currencies daily %
Latest change
Brazil real 4.1157 -0.94

Mexico peso 19.8984 -0.41

Chile peso 718.2 -0.65

Colombia peso 3421.24 -0.97
Peru sol 3.375 -0.03

Argentina peso 55.1500 -0.03

(Reporting by Agamoni Ghosh in Bengaluru
Editing by Sonya Hepinstall)

First Published: 2019-08-23 15:59:39
Updated 2019-08-23 21:32:40

© 2019 Thomson Reuters. All rights reserved. Reuters content is the intellectual property of Thomson Reuters or its third party content providers. Any copying, republication or redistribution of Reuters content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters. Thomson Reuters shall not be liable for any errors or delays in content, or for any actions taken in reliance thereon. "Reuters" and the Reuters Logo are trademarks of Thomson Reuters and its affiliated companies.