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Chilean peso leads Latam FX higher as stocks pause

By Shreyashi Sanyal Jan 20 (Reuters) – The Chilean peso led a rise in Latin American currencies on Monday, taking their cue from firmer copper prices as stocks took a breather ahead of key central bank meetings this week. Chile, the world’s top producer of copper, saw its currency firm 0.5% to 770.90 to the dollar after data on Friday showed a surprise acceleration in Chinese industrial output. A basket of currencies in Latin America rose 0.1%, following two consecutive days of declines. Now the focus will shift to monetary policy as the Bank of Japan gears up to announce its rate decision on Tuesday. The European Central Bank has its first meeting of the year on Thursday. Investors have heightened their exposure to riskier assets after the cooling of trade tensions between the United States and China, with optimism rising following the signing of an initial trade deal between the two sides last week. “Accommodative policy and the reduction of downside risk following the signing of the Phase 1 U.S.-China trade deal will help support the economy and risk assets,” said Mark Haefele, chief investment officer at UBS Global Wealth Management. But the Brazilian real weakened 0.5% to 4.1836 against the dollar and was among the few major Latin American currencies in the red. “The Brazilian real is the worst performer with its small trade exposure to China limiting support from the signing of the US/China Phase 1 trade deal,” said Jane Foley, senior FX strategist at Rabobank. Brazil’s main stock index fell 0.2% with shares of B3 SA, the operator of the Sao Paulo stock exchange, down 1%. Eyes will also be on Colombia’s peso as the price of oil, the country’s main export, shot up after two large crude production bases in Libya began shutting down amid a military blockade, risking reducing crude flows from the OPEC member to a trickle. Key Latin American stock indexes and currencies at 1437 GMT: Stock indexes Latest Daily % change MSCI Emerging Markets 1145.12 -0.15 MSCI LatAm 2922.38 -0.08 Brazil Bovespa 118279.82 -0.17 Mexico IPC – – Chile IPSA 4861.72 -0.4 Argentina MerVal 42832.49 1.164 Colombia COLCAP 1660.49 0.27 Currencies Latest Daily % change Brazil real 4.1836 -0.47 Mexico peso 18.6669 -0.06 Chile peso 770.2 0.30 Colombia peso 3330.75 0.00 Peru sol 3.3208 0.01 Argentina peso 59.9500 0.10 (interbank) (Reporting by Shreyashi Sanyal in Bengaluru; editing by Nick Macfie)

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