EMERGING MARKETS-Brazil’s real up on China relief, Mexican peso trims early gains

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    * Metal prices rise after China Evergrande makes bond
payment
    * Mexican central bank hikes rates by 25 bps to 5%
    * Peru's central bank expected to raise rates by 50 bps
    * Chile's economy set to grow more than 11% this year -
Piñera

 (Adds details on Mexican rate hike, updates prices)
    By Ambar Warrick
    Nov 11 (Businesshala) - Brazil's real hit a one-month high on
Thursday as metal prices rose on some relief over China
Evergrande, while Mexico's peso shed early gains after the
central bank raised its benchmark interest rate as expected.
    Mexico's peso traded nearly flat after rising as much
as 0.9%. 
    The Mexican central bank hiked rates by 25 basis points to
5.0%, citing concerns over rising prices as inflation rose to
more than twice the bank's target rate in October.

    Declines in oil prices also weighed on the peso, with crude
exporter Colombia's currency trading flat.
    Rising inflation, which could potentially stifle economic
growth, has been a major concern for emerging markets this year,
with several central banks hiking interest rates in response. 
    Still, some analysts expect emerging market currencies to
eventually benefit from higher rates, given that they offer
relatively stronger returns on investment.  
    "Markets are reacting with buying of currencies of those
countries where central banks preferred to raise rates. This
trend will only gain strength as inflationary pressures ease as
it entails rising real bond yields and attracts buyers into
bonds," said Alex Kuptsikevich, a senior financial analyst at
FxPro. 
    Peru's central bank is also seen hiking by 50 basis points
later on Thursday to 2%. The sol rose 0.2% ahead of the
meeting. 
    Brazil's real jumped 1.9% to a more-than
one-month high, taking support from a rise in iron ore and
copper prices after reports said Chinese property developer
Evergrande made its bond payments. 
    The Evergrande news fed hopes of government support for a
property sector that can drive significant demand for metals.
         
    Uncertainty over Brazil's fiscal position seemingly fell
after the lower house approved a constitutional amendment
allowing for more spending. But Senate passage is now awaited. 
 
    Sao-Paulo listed shares surged 1.9%, with airline
Azul SA, up nearly 10% on positive operating
figures.
    Emerging market currencies had taken a hit in the previous
session after a surge in U.S. inflation raised rate hike bets
there, sending the dollar to 16-month highs and bond yields
rising.
    South Africa's rand rallied 1%, nearing seven-week
highs, attempting to make back Wednesday's 2.7% drop post U.S.
inflation data. In its medium-term budget policy statement here,
 South Africa cut its deficit forecast, and now sees debt
peaking at a lower level. 
    Chile's peso rose slightly as President Sebastián
Piñera said the economy is set to grow more than 11% this year,
amid a rapid recovery from the impact of the coronavirus
pandemic.
    Latin American stock indexes and currencies:
    
                              Latest    Daily % change
 MSCI Emerging Markets         1280.92            0.51
                                        
 MSCI LatAm                    2218.10            1.77
                                        
 Brazil Bovespa              107935.34            1.86
                                        
 Mexico IPC                   51724.51            0.04
                                        
 Chile IPSA                    4519.86            0.69
                                        
 Argentina MerVal             96203.84           1.128
                                        
 Colombia COLCAP               1366.23            0.04 Currencies             Latest    Daily % change
 Brazil real                    5.3984            1.91
                                        
 Mexico peso                   20.5935            0.13
                                        
 Chile peso                     793.18            0.10
                                        
 Colombia peso                 3876.53           -0.04
 Peru sol                       4.0061            0.22
                                        
 Argentina peso               100.1800           -0.03
 (interbank)                            
                                        
 
 (Reporting by Shashank Nayar and Susan Mathew in Bengaluru;
Editing by Andrea Ricci and Grant McCool)
  
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