* Latam FX down 0.5%, stocks down 1.2%
* Mexico's annual inflation cools to 3.55% in first half of
June
* Holding rates only viable option: Chile cenbank minutes
* Peru's Keiko Fujimori secures unbeatable lead in election
(Updates with late afternoon trading)
By Avinash P and Ragini Mathur
June 24 (Reuters) - Latin American stocks and currencies
slid on Wednesday, pressured by a resurgent U.S. dollar, while
investors weighed the sustainability of recent rallies sparked
by right-wing election victories in Peru and Colombia.
The MSCI index tracking Latin American currencies
fell 0.5% to an over two-week low.
The dollar extended its ascent, climbing to a
13-month high, as investors piled into the greenback after
Tuesday's tech-led selloff in global markets and as expectations
of Federal Reserve rate hikes rose.
ELECTIONS FRONT AND CENTER
Conservative Keiko Fujimori gained an insurmountable lead in
Peru's presidential runoff, setting her on track to be the first
elected female president of the country.
Her expected win follows Colombia's right-wing candidate
Abelardo De La Espriella's victory in presidential elections on
Sunday, reinforcing a broader rightward shift across the region.
"Victories for right-wing candidates in this month's
presidential elections have boosted the sol and peso. But future
gains will depend on whether the new governments can make
meaningful progress on fiscal challenges," said Kimberley
Sperrfechter, senior emerging markets economist at Capital
Economics.
Both candidates are considered market favorites due to their
promises of business-friendly policies, with the
countries' assets rallying sharply in the weeks leading up to
the final votes.
However, the streak will be tested in the October elections
in Brazil, where current leftist President Luiz Inacio Lula da
Silva is leading opinion polls.
Stocks in Peru and Colombia fell
0.8% and 1.9%, respectively on Wednesday, putting both markets
on track for their third day of losses.
Currencies fared no better, with Peru's sol down
0.5%, while Colombia's peso weakened 0.3%, easing from
over five-year highs.
Elsewhere, Venezuela's sovereign bonds rose as much as 1
cent on the dollar after the Financial Times reported that a
forthcoming estimate would put the country's total debt at about
$240 billion.
The bonds have pulled back over the past month after an
unprecedented rally triggered by the U.S. capture of Nicolas
Maduro in January.
Mexico's annual inflation rate hit 3.55% in the first half
of June, data showed, below expectations and slowing compared to
the same period last month.
The data comes ahead of the central bank's interest rate
decision later this week, where the bank is widely expected to
hold rates steady, after ending an over two-year-long easing
cycle at the last meeting.
"Although inflation generally dipped in May, it will rise in
the coming months. Central banks in Mexico, Chile and Peru are
likely to hike interest rates over the next 12 months,"
Sperrfechter added.
COMMODITIES WEIGH ON STOCKS
The rising dollar brought gold prices to seven-month lows
and copper to its lowest since May 5. Oil prices settled around
$70 a barrel, to levels before the Iran war started.
Heavyweight miners Grupo Mexico and YPF
fell over 4% each, Vale lost 2%, while oil
firms Petrobras and Ecopetrol were
down 2.9% and 5.8%, respectively.
Argentina's Merval was the biggest decliner, down
4.2%, while stocks in Mexico, Brazil and Chile
lost between 0.3% and 0.6%.
MSCI's regional stocks gauge dipped 1.2%, to
a near two-week low.
Chile's peso weakened 0.7% against the dollar, set
for its sixth session of declines - its longest losing streak
this year.
Minutes from Chile's June central bank meeting showed
policymakers considered keeping the key rate unchanged as the
only viable option, citing greater-than-usual global
uncertainty.
Key Latin American stock indexes and currencies:
Latin American market
prices from Reuters
Equities Latest Daily %
change
MSCI Emerging Markets 1730.74 -0.17
MSCI LatAm 2904.7 -1.23
Brazil Bovespa 170710.6 -0.32
Mexico IPC 66377.16 -0.6
Chile IPSA 10728.08 -0.39
Argentina Merval 3111589.7 -4.21
6
Colombia COLCAP 2302.15 -1.91
Currencies Latest Daily %
change
Brazil real 5.2018 -0.42
Mexico peso 17.6262 -0.43
Chile peso 919.86 -0.71
Colombia peso 3426.58 -0.28
Peru sol 3.4206 -0.97
Argentina peso (interbank) 1479 -0.58
Argentina peso (parallel) 1510 -1.68