EMERGING MARKETS-Mexican peso hits 11-month low; investors focus on Brazil polls

By Reuters News

By Sudeshna Ghoshal and Johann M Cherian

- Mexico's peso hit a more than 11-month low and led losses among Latin American currencies on Wednesday as Iran said the US should not expect dialogue on ending their war, while a tight presidential race in Brazil kept investors on edge.

MSCI's index tracking regional equities .MILA00000PUS and a currencies gauge .MILA00000CUS shed 0.4% each.

The Mexican peso weakened 1.2% against the dollar and is among the region's top decliners this month, compounded by uncertainty over its trade negotiations with the US and comments by the local central bank earlier in October that investors viewed as dovish.

Equities .MXX gained 0.7% on the back of a slate of positive quarterly results from América MóvilAMXB.MX and miner Grupo Mexico GMEXICOB.MX.

The US cannot expect dialogue with Iran while blockading and threatening it, Iranian President Masoud Pezeshkian said on Wednesday, according to state media. Oil prices hovered near five-month highs of $109 a barrel. O/R

EYES ON BRAZIL VOTE

The bigger focus in the region was Brazil, with a runoff expected on Sunday between Senator Flavio Bolsonaro and President Luiz Inacio Lula da Silva.

"The prospect of a Bolsonaro victory and a market-friendlier turn in policy has buoyed assets in Brazil," said Hasnain Malik, managing director, geopolitical risk and emerging markets equity strategy at Tellimer.

"But the rally has been so acute that there is not much risk of any backlash against austerity or non-compliance by the centrist bloc in Congress."

A Quaest poll, the institute's first since a debate between the candidates last Sunday, showed Bolsonaro's lead over Lula narrowing.

The real was little changed at 5 per dollar, having gained nearly 3% this month, which would be its biggest monthly gain since April.

The Bovespa index .BVSP eased 0.2% but was still on track for its steepest monthly rise, of about 11%, since January.

Colombia's peso declined 0.6% and the COLCAP index .COLCAP was flat after lawmakers said the 2027 budget bill approved by the Colombian Congress could be scrapped due to a procedural flaw linked to a discrepancy in the text.

Weaker copper prices also weighed on the currencies of exporters including Peru and Chile .

Ukrainian bonds , gained 1.6 cents on the dollar after Russian President Vladimir Putin agreed to resume US-mediated peace talks with Ukraine as soon as next month.

The Israeli shekel firmed 0.5% after the local central bank left short-term interest rates unchanged amid stable inflation, opting to pause ahead of the country's general election next week.

Key Latin American stock indexes and currencies at 1525 GMT:

Stock indexes

Latest

Daily % change

MSCI Emerging Markets .MSCIEF

1615.17

0.96

MSCI LatAm .MILA00000PUS

3362.06

-0.37

Brazil Bovespa .BVSP

207873.53

-0.2

Mexico IPC .MXX

69720.12

0.67

Chile IPSA .MMXIPSAGC

10917.29

-0.09

Argentina MerVal .MERV

2848945.27

-0.35

Colombia COLCAP .COLCAP

2533.43

0.01

Currencies

Latest

Daily % change

Brazil real

5.0221

0.11

Mexico peso

18.6366

-1.24

Chile peso

976.25

-0.21

Colombia peso

3194.59

-0.57

Peru sol

3.429

-0.11

Argentina peso (interbank)

1,526.5

-0.10

Argentina peso (parallel)

1,555.0

0.96

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