EMERGING MARKETS-Latam FX jumps as dollar slides on dire U.S. data; stocks fall
By Agamoni Ghosh Oct 3 (Reuters) - Latin American currencies moved higher on Thursday against the dollar as a weak reading of service sector activity in the United States raised doubts about the health of the world's largest economy. U.S. services sector growth slowed to its most anemic pace in three years last month, and job growth in the largest slice of the American economy was the weakest in half a decade, a survey of purchasing managers showed on Thursday. Latin American currencies which had made modest gains since the morning jumped after the greenback slid but most stock indices reversed course to fall as global slowdown fears intensified. "We know manufacturing in the U.S. is already in recession, now we have to see if services follow suit," said Christian Lawrence, senior market strategist, LatAm FX at Rabobank. "For Latam currencies, the move is a short-term reaction to the dollar's weakness and expect it to fade." Colombia's peso and Chile's peso rose nearly 1%, leading gains, while Brazil's real firmed 0.8%. Also helping the real was the latest reading of service sector activity in Latin America's largest economy which expanded in September at the fastest pace in six months. Investors will now be closely monitoring progress related to a landmark pension reform bill, whose final vote of approval from the Senate is expected to be completed by later this month. "It's not a done deal yet so that is a lingering risk, but the market is pretty much pricing in a passage, so any sign of delay or hindrance to that could result in a huge sell-off," said Lawrence. Sao Paulo-listed stocks led losses among stocks, with shares of consumer good companies falling the most. Brazilian telecom carrier Oi SA slipped over 2% after Chief Operating Officer Rodrigo Abreu told Reuters it may sell its mobile operation if it gets attractive offers. Mexican stocks made the smallest losses, while those in Chile slipped 0.4%. Latin American stock indexes and currencies at 14:49 GMT Stock indexes daily % change Latest MSCI Emerging Markets 990.41 0.12 MSCI LatAm 2613.18 0.09 Brazil Bovespa 100522.92 -0.5 Mexico IPC 42198.33 -0.06 Chile IPSA 4994.74 -0.44 Argentina MerVal 30648.65 -0.46 Colombia IGBC 12760.37 -0.14 Currencies daily % change Latest Brazil real 4.0939 0.88 Mexico peso 19.7526 0.21 Chile peso 717.46 0.98 Colombia peso 3464.17 0.93 Peru sol 3.3748 0.39 Argentina peso 57.7850 0.08 (interbank) (Reporting by Agamoni Ghosh Editing by Nick Zieminski)
