EMERGING MARKETS-Latam currencies drop for 2nd day on U.S. data
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SAO PAULO, Nov 26 (Reuters) - Latin American currencies weakened for a second consecutive session on Tuesday as strong U.S. housing data supported the case for an early withdrawal of U.S. stimulus, which could hurt investors" appetite for risk assets. Brazil"s real led losses in the region as investors, worried about a deterioration in the country"s fiscal fundamentals, have been punishing the currency harder. Other currencies also suffered after reports showed permits for future U.S. home construction rose to the highest level in nearly 5-1/2 years in October, while U.S. single-family home prices in September posted their strongest annualized gain in 7-1/2 years. "Today we have a slightly more negative risk perception by foreign investors," said Flavio Serrano, senior economist with Espirito Santo Investment Bank in Sao Paulo. * Brazil"s real lost 0.5 percent, crossing the mark of 2.3 per dollar, which seems to be a key resistance level as it is also its 14-day moving average. * Investors in the Brazilian real are bracing for Friday"s release of the government"s fiscal performance for October, after an unexpected primary deficit of 9 billion reais in September fanned concerns about President Dilma Rousseff"s commitment to fiscal targets. * Cushioning losses in the real were expectations that foreign oil companies will bring dollars from abroad to pay for a signing bonus related to an exploration concession for the offshore oil area of Libra. The deadline for the bonus payment is Wednesday. * Losses in the real were also curbed by regular central bank auctions of currency swaps, derivatives that mimic a sale of dollars in the futures market. On Tuesday the bank sold 10,000 swaps through its daily intervention program and another 20,000 swaps to roll over similar contracts that expire on Dec. 2. * Mexico"s peso lost 0.15 percent to 13.0640 per dollar, crossing without much conviction its 14-day moving average of 13.05 per dollar. * The Chilean peso lost 0.2 percent as the price of copper, the country"s main export product, slid 0.4 percent on the London Metal Exchange. Latin American currencies at 1645 GMT: Currencies daily % YTD % change change Latest Brazil real 2.2975 -0.48 -11.21 Mexico peso 13.0640 -0.15 -1.53 Chile peso 522.0000 -0.21 -8.30 Colombia peso 1926.0000 -0.06 -8.31 Peru sol 2.8030 0.00 -8.99 Argentina peso 6.0925 -0.16 -19.37 Argentina peso 9.8300 0.92 -31.03 We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/
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