* Brazil's IGP-10 price index falls 0.58 pct in April * Shares in Brazil's 3R fall after capital increase approved * Peru's GDP declines 0.63% in Feb,
* Brazil’s IGP-10 price index falls 0.58 pct in April * Shares in Brazil’s 3R fall after capital increase approved * Peru’s GDP declines 0.63% in Feb, beats expectations * Latam FX slips 0.1%, stocks up 0.1% By Bansari Mayur Kamdar April 17 (Reuters) – The Peruvian sol inched up on Monday after better-than-expected economic activity data, while most other Latin American currencies fell after the U.S. dollar bounced as traders eyed another interest rate hike from the Federal Reserve. The sol gained 0.2% against the greenback, after February’s economic activity data beat estimates of a bigger fall. Peru’s GDP shrunk 0.63% in February compared with the same month last year, extending its decline to a second straight month after the economy began to contract in January hurt by nationwide anti-government protests. Chile’s peso fell 0.7% against a firmer dollar. The dollar index, which measures the currency against six peers, rose 0.5%, recovering from a one-year low hit in previous session, after a barrage of mixed U.S. economic data bolstered expectations of another Fed hike in May. Brazil’s real slid 0.9% against the dollar after central bank data showed its economic activity fell in January, highlighting the trend of economic slowdown amid high borrowing costs. Another set of data found inflation in Brazil as measured by the IGP-10 price index fell 0.58% in April, compared to a 0.05% gain in March. The real was still on track for sharp monthly gains and among the top performing EM currencies in April. “The real yield in Brazil is very high, inflation has come down fast and the central bank has not yet reacted to the policy rate that is very high relative to the levels of inflation,” said David Austerweil, deputy portfolio manager for Emerging Markets Fixed Income at VanEck. “A lot of noise has been priced already from the Lula administration … There’s definitely an ample room for interest rates to decline in Brazil from very high levels and for the exchange rate to appreciate and we’ve seen a lot of that play out recently.” Colombia’s peso snapped its 10-day winning streak against the dollar, slipping 0.2%, while the Mexican peso eased 0.6%. MSCI’s index for Latin American currencies edged 0.1% down by 1050 ET, while regional stocks index edged 0.1% higher. Brazil’s Bovespa index edged down as utility shares weighed. Adding to losses, Brazilian oil firm 3R Petroleum Oleo e Gas SA dropped 9.6% after it announced its board had approved a capital increase of up to 900 million reais ($183.36 million) through the issue of new shares. Petrobras said it will cut natural gas prices by an average 8.1% starting May 1 when compared with the February-April quarter. Shares of the Brazilian state-run oil company added 1.4%. Key Latin American stock indexes and currencies: Stock indexes Latest Daily % change MSCI Emerging Markets 1002.04 0.15 MSCI LatAm 2290.02 0.1 Brazil Bovespa 106230.75 -0.05 Mexico IPC 54696.03 0.43 Chile IPSA 5465.22 0.89 Argentina MerVal 276896.77 0.428 Colombia COLCAP 1261.81 0.68 Currencies Latest Daily % change Brazil real 4.9514 -0.76 Mexico peso 18.1266 -0.72 Chile peso 801.7 -0.75 Colombia peso 4419.35 -0.18 Peru sol 3.7765 -0.38 Argentina peso (interbank) 216.3000 -0.55 Argentina peso (parallel) 396 1.01 (Reporting by Bansari Mayur Kamdar in Bengaluru, Editing by Angus MacSwan)
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