EMERGING MARKETS-Brazil leads Latam currencies lower on Fed worries
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RIO DE JANEIRO, Nov 1 (Reuters) - The Brazilian real led Latin American currencies down on Friday as investors tested new technical levels after the currency sold off about 2 percent in the previous session on fears of an early withdrawal of U.S. stimulus. Concerns that the U.S. Federal Reserve may start winding down its bond-buying program this year, potentially reducing the flow of dollars seeking higher yields in emerging markets, have caused Latin American currencies to weaken in the past few days. Those fears were on the rise again on Friday after data showed the U.S. manufacturing sector expanded at its fastest pace in 2-1/2 years last month. * The Brazilian real weakened to as much as 2.2593 per dollar, briefly crossing its 100-day simple moving average, considered by analysts as a key resistance level for the currency. * The real had already weakened nearly 2 percent on Thursday, breaking key resistance marks that encouraged investors to test weaker levels for the currency. * Traders expect the real to strengthen back to the level of 2.2 per dollar in coming days, however, as dollars as foreign oil companies send dollars into the country to pay for a signing bonus related to a concession to explore the offshore oil area of Libra. * In an apparent attempt to cushion the real"s losses, central bank monetary policy director Aldo Luis Mendes stressed that the bank"s current intervention program in foreign exchange markets has no set date to end. * The Mexican peso slid 0.3 percent to 13.0550 per dollar, its weakest level in three weeks, also weighed by data showing the country"s factories remained stagnant in October despite recent interest-rate cuts by the central bank. Latin America FX prices at 1505 GMT: Currencies daily % YTD % change change Latest Brazil real 2.2467 -0.58 -9.20 Mexico peso 13.0550 -0.26 -1.46 Chile peso 506.9000 0.36 -5.56 Colombia peso 1899.4000 -0.37 -7.02 Peru sol 2.7720 -0.51 -7.97 Argentina peso 5.9175 -0.08 -16.98 Argentina peso 9.8600 0.61 -31.24 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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