EMERGING MARKETS-LatAm currencies pressured by dollar rally after turbulent week

       By Medha Singh
    Sept 25 (Reuters) - A strong dollar pressured most Latin
American currencies on Friday, as investors averted risky bets
at the end of a turbulent week on global equity markets and
attention turned to Colombia's impending monetary policy
decision.
    Brazil's real led declines with a 1% drop as
investors preferred the safety of the greenback in the face of
rising risks to the global economic recovery and political
uncertainty tied to the Nov. 3 U.S. presidential election.
    An impasse in the U.S. Congress over another relief package
to battle the economic fallout of the coronavirus crisis also
weighed.
    MSCI's index of developing world stocks and
currencies were on pace for their biggest weekly
slump since the coronavirus-led crash in March.
    "Brazil seems better positioned than Mexico for the recovery
in labor markets," Morgan Stanley economists wrote in a note,
adding that soft forward-looking indicators continue to point to
Brazil's economy outperforming in the future.
    Brazil's central bank has lifted its GDP outlook for South
America's largest economy as the COVID-19 epidemic there is
expected to enter a less acute phase in the fourth quarter.

    A drop in oil prices pressured energy exporters, with the
Mexican peso shedding 1.2% and Colombia's peso
hovering near a four-month low.
    Markets were split over whether Colombia's central bank will
continue a cycle of interest rate cuts meant to boost the
coronavirus-battered economy or pause after months of
reductions. The decision is due to be announced around 4 p.m.
EDT (2000 GMT).
    The battered Argentine peso weakened further
after hitting a series of record lows. FTSE Russell downgraded
Argentina's stock market to "unclassified" from "frontier
market" as the country tightened access to foreign currency.

    Argentine companies are also facing an increasingly
difficult task to keep up with payments on dollar-denominated
debt, hiking the risk of a wave of corporate defaults amid
capital controls.
    Chile's peso retreated to a one-month low, tracking a
drop in the price of copper, the country's top export.

    Stocks in Chile were provided a bright spot,
rising 0.3% while those in Mexico, Brazil and
Colombia dropped in the range of 0.7% and 1.3%.

    Key Latin American stock indexes and currencies at 1441 GMT:

 Stock indexes                                  daily % change
                                     Latest
 MSCI Emerging Markets                 1055.58            -0.2
 MSCI LatAm                            1832.73           -0.64
 Brazil Bovespa                       96138.28            -0.9
 Mexico IPC                           36061.10           -0.43
 Chile IPSA                            3579.50            0.23
 Argentina MerVal                     41643.77          -0.554
 Colombia IGBC                         1178.18            -0.2

 Currencies                                     daily % change

                                        Latest
 Brazil real                            5.5724           -1.08
 Mexico peso                           22.4355           -1.29
 Chile peso                                788           -0.48
 Colombia peso                         3857.95           -0.85
 Peru sol                                 3.59            0.00
 Argentina peso (interbank)            75.8400           -0.08



 (Reporting by Medha Singh in Bengaluru
Editing by Paul Simao)

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