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LatAm Currencies Up as Traders Bargain Hunt
 Samantha Pearson - Reuters
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November 09, 2010
Sao Paulo - Latin American currencies firmed early Tuesday as traders saw buying opportunities following heavy losses in the previous session.
On the local spot market, the bid quote for the real BRBY strengthened 0.35 percent to 1.691 against the U.S. dollar.
The real suffered its biggest one-day loss in more than two weeks on Monday as the dollar recovered in the wake of U.S. stimulus measures.
"International currency markets trading close to flat means there is more room for a technical adjustment in the real's exchange rate after the strong (depreciation) yesterday," said Luciano Rostagno, chief strategist for CM Capital Markets in Sao Paulo.
The Mexican currency strengthened 0.27 percent to 12.196 per dollar, clawing back moderate losses in the previous session.
The Chilean peso firmed 0.57 percent to 477.50 per dollar, boosted by the higher price of copper, the country's main export.
BRAZIL RATE DEBATE HEATS UP
Yields rose on Brazilian interest rate futures after inflation data prompted traders to bet the country may have to resume raising the cost of borrowing.
The yield on the contract due January 2012, one of the most popular contracts of the early session, rose to 11.47 percent from 11.42 percent.
Inflation in Brazil rose more than expected in October due to higher food costs, data showed on Tuesday.
Traders have become increasingly divided over the outlook for borrowing costs in Latin America's biggest economy.
Interest rates in Brazil have remained on hold at 10.75 percent since September, when the bank broke the monetary tightening cycle begun in April.
Speculation has mounted that interest rates could soon fall after President-elect Dilma Rousseff pledged to control inflation and rein in government spending.
But food prices are also rising fast, indicating Brazil may have to raise interest rates to curb inflation. In minutes from its latest monetary policy meeting, the central bank said it is ready to change monetary policy quickly, if needed.
(Editing by Jeffrey Benkoe)
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