EMERGING MARKETS-Latam currencies seesaw on U.S. holiday

* Chile’s peso hits fresh 8-month high, then erases gains

* Brazil’s real firms 0.2 pct, Mexican peso flat

* Brazil and Jewish holidays to restrict volumes this week

By Samantha Pearson

SAO PAULO, Sept 6 (BestGrowthStock) – Latin American currencies bounced around their
previous session’s closing levels on Monday as investors were reluctant to take
decisive bets because of a public holiday in the United States.

Not only will many North American investors take the day off work but the lack of
U.S. data means there will be few fresh clues about the outlook for global economic
growth and demand for Latin America’s exports.

The Brazilian real (BRBY: ) seesawed and was later bid 0.17 percent stronger at
1.726 reais per U.S. dollar on the local spot market, trading not far from its
strongest level this year.

Independence day celebrations in Brazil on Tuesday mean many local investors will
not return to the office until Wednesday.

“The real should continue to appreciate against the U.S. dollar, even though there
are low volumes in the market,” said analysts at Brazil’s Bradesco bank in a note to

Optimism over a massive fund-raising plan by state-run oil company Petrobras has
boosted Brazil’s currency in recent weeks, even at times when investors were ditching
other higher-risk assets.

Latin America’s biggest economy has also been growing fast thanks to internal
demand. Analysts in a weekly central bank survey on Monday raised sharply their growth
forecasts for Brazil’s economy in 2010. [ID:nN06158189]

But in a market with such low volumes, “anything could happen”, said one economist
at a brokerage in Sao Paulo. “Tomorrow is a holiday here, then afterward there is a
Jewish holiday (Jewish New Year). This week is more or less done for.”

The Mexican currency (MXN=: ) weakened 0.04 percent to 12.9240 per dollar.

Mexico’s fragile recovery from a deep recession is particularly dependent on U.S.
growth since it sends as much as 80 percent of its exports over its northern border.

The Chilean peso (CLP=: ) was flat at 496.20 per dollar, erasing small gains that
took the currency to a fresh 8-month intraday high earlier in the session.

The peso has rallied due to the rising price of copper, its main export, which hit
a fresh 4-month high on Monday. [ID:nLDE68517M]

Chile’s economy has also recovered much faster than expected from the effects of a
devastating earthquake in February.

Chile’s economy expanded a seasonally adjusted 1.3 percent in July versus June,
above forecasts of a 0.65 percent expansion, the central bank said on Monday.

“The data was a little better than expected and, in general, it is going to
legitimize the type of level we have have been talking about in the short-term of
490/488,” said one trader in Santiago.

(Additional reporting by Silvio Cascione in Sao Paulo and Maria Jose Latorre in
Santiago, editing by Martin Golan)

EMERGING MARKETS-Latam currencies seesaw on U.S. holiday