Yahoo Finance EMERGING MARKETS-Mexico peso edges up, but Trump trade risks loom
(Recasts with peso outlook, adds analyst comments) MEXICO CITY, Dec 2 (Reuters) - Mexico's peso ended the week slightly higher, but remained vulnerable to concerns about shifts in U.S. trade policy under the incoming administration of U.S. President-elect Donald Trump while Brazil's real wobbled on uncertainty over fiscal reform.
The Mexican peso rose on Friday, ending the week up about 0.3 percent at 20.64 per dollar. The peso has traded in an increasingly narrow range after blowing out to a record low following Trump's unexpected victory on Nov. 8.
Trump has threatened to curtail trade with Mexico, which sends about 80 percent of its exports to its northern neighbor.
Analysts at Mexican bank Banorte said in a note on Friday that concerns about changes to the U.S.-Mexico trade relationship would continue to weigh on the peso. The bank projects the currency could end the year at 21.50 per dollar.
The peso is one of the most liquid emerging market currencies and it tracks sentiment on risky assets. Banorte said it could also suffer if elections in Italy and Austria on Sunday feed concerns about growing anti-establishment movements.
Strategists at Citi on Friday said that even though some contrarian investors are betting the Mexican peso has become cheap, their research showed the buying laggard currencies did not pay off in bearish markets for emerging market currencies.
While the Mexican peso is down about 19 percent this year, Brazil's real is up about 14 percent, supported by hopes the country's new president will implement fiscal reform plans while high interest rates are also fueling demand.
However, the real has suffered recently due to concerns about Trump's impact on global trade as well as worries that President Michel Temer's reform agenda could stall.
The real was little changed on Friday after weakening more than 2.3 percent in the previous session on fears that friction between lawmakers and prosecutors over corruption cases could delay the approval of austerity measures.
Brazil's benchmark stock index rose nearly 1.4 percent, recouping some of its over 2 percent drop on Thursday.
Key Latin American stock indexes and currencies at 0015 GMT: Stock indexes daily YTD % % change Latest change MSCI Emerging Markets 853.07 -0.62 7.42 MSCI LatAm 2248.27 0.72 22.87 Brazil Bovespa 60316.13 1.36 39.14 Mexico IPC 44555.26 -0.73 3.67 Chile IPSA 4202.98 0.13 14.20 Chile IGPA 20991.27 0.09 15.64 Argentina MerVal 16947.76 -0.55 45.16 Colombia IGBC 9725.55 0.71 13.78 Venezuela IBC 38483.35 5.96 163.80 (Reporting by Michael O'Boyle; editing by Diane Craft)
