Latin American currencies steady, rising commodity prices boost stocks

Updated at 3:15 pm ET/1945 GMT

By Shashwat Chauhan and Lisa Pauline Mattackal

Feb 16 (Reuters) –Most Latin American currencies were little changed against the dollaron Friday, as investors digested hotter-than-anticipated U.S. producerprice data, while stocks in the region were boosted by rising commodity prices.

MSCI’s gauge for Latin American currencies .MILA00000CUS edged 0.1% higher, on track for a 0.2% weekly gain against a roughly flat dollarafter data showed U.S. producer prices increased more than expected in January.

“This data, in addition to Tuesday’s strong consumer price index, suggests that the Federal Reserve has very little reason to cut interest rates anytime soon,” said Clark Bellin, chief investment officer at Bellwether Wealth.

Many of the region’s commodity-sensitive stocks rose as copper prices were on track for their largest weekly gain in eleven months, and oil prices rose. O/R MET/L

A basket of Latin American stocks .MILA00000PUS rose 0.7% on the day, touching one-week highs, set for its best week in three as Brazilian miner Vale VALE3.SA jumped 3.6%.

Brazil’s Bovespa index .BVSP gained 0.8%, boosted by rising materials and energy shares. Shares of state-owned oil company Petrobras PETR4.SA rose 1%.

Emerging market currencies have been pressured this week as mixed U.S. data has pushed the dollar higher, with bets now showing a near 72% change of a cut in June, according to CME’s FedWatch tool, rather than in March.

MSCI’s gauge of global emerging market currencies .MIEM00000CUS was about flat on the week.

“As usual, the flip side of the U.S. dollar strength will be weakness in emerging market risk assets … this confirms our assessment that economic conditions in the rest of the world remain much more challenging than in the U.S,” BCA Research analysts said in a note.

Elsewhere, an index tracking global emerging market stocks .MSCIEF gained over 2% in its best week since end-December, lifted by bourses in Asia.

Mexico’s benchmark index dipped 0.3%, weighed down by a 6.4% plummet in shares of retailer Femsa FEMSAUBD.MX after the company announced a major capital expenditure plan.

Stocks in Argentina .MERV eased 2.6%, and Chilean stocks .SPIPSA advanced 2.4%.

Brazil’s real BRL= edged 0.1% higher. Top copper producer Peru’s sol PEN=PE rose 0.8%.

Colombia’s peso COP= and Mexico’s peso MXN= were little changed.

However, Chile’s peso CLP= fell 0.5%, extending losses from the previous session.

Elsewhere,Kenya’s shilling KES= logged a near 10% rise this week, its best weekly percentage gain since 1990 as foreign inflows into Kenyan domestic debt increased.

HIGHLIGHTS

** Russian central bank holds rates at 16% after months of tightening, rouble slips after Alexei Navalny, Russian President Vladimir Putin’s most formidable domestic opponent was reported dead

** India cenbank extends deadline for Paytm banking unit wind-down

**Brazil’s central bank monetary policy director Gabriel Galipolo emphasized the bank remains data dependent.

Key Latin American stock indexes and currencies at 1945 GMT:

Reporting by Shashwat Chauhan in Bengaluru; editing by Jonathan Oatis and Diane Craft