Brazil's consumer confidence jumps after Fed's U.S. statement

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By Ambar Warrick and Shashank Nayar January 28 - Brazil's consumer confidence looks up after US dovish signals from the US Federal ReserveUS Federal Reserve got credit for mortgage rates and added to a record high for foreign fixed assets.The MSCI index of Latin American currencies jumped 1.1% to its highest level since late January, after the Fed held interest rates and its monthly bond buying program steady and did no sign it was ready to tighten policy.The yields of the Treasury were sharply dropped after the statement.The Fed recognized that the rapid economic recovery continues to raise inflation concerns among market participants, but they haven't been dragging on their stance that the anticipated upticks of inflation brought on by the recovery will remain transitory, said Charlie Ripley, senior investment strategist for Allianz Investment Management.While concerns over increased US inflation earlier in this year pushed up Treasury yields and pressured emerging markets currencies, the Fed’s constant dovish signals from the Fed had helped capital flows return to EM forex and debt.Latam stocks rose by 1.5% to their lowest since late January, with Brazil's Bovespa leading gains in the region.Broader emerging market currencies hit two-month highs, while stocks hit a 1 month high on 1 -- 1 month record.Brazil's real has risen 1.8% to its highest point since mid-February after consumer confidence marked its biggest increase in nine months in April.The government also increased its future cash buffer in March to cover future debt obligations, as a second wave of the COVID 19 pandemic tore through the country.The imminent passing of the budget for 2021, officially supporting the spending cap and affirmation efforts that tax and administrative reforms would be extended, supported BRL-positive sentiment, said Melanie Fischinger, an emerging markets analyst at Commerzbank.The Peruan Sol was the top performer in Latam on Wednesday, beating 1.9% in what was forecast to be its biggest daily gain in a year.The currency recovered from several sessions of record lows, spurred by concerns over a socialist presidency.European oil rates in Mexico and Colombia increased respectively to 0.7% and 0.6% while exporting higher crude prices.A Reuters poll has shown the Mexican economy likely grew only marginally during the first quarter of the year due to the impact of the coronavirus pandemic and the energy shortages in February.Chile's peso rose 0.8%, even as copper prices fell from 10 year highs.But analysts at Goldman Sachs joined others predicting a copper rally to record levels.CI Emerging Markets 1367.27 0.39 Mexico IPC 48498.89 - 3.35 Colombia Interval Reseus Colombia Concours Dialogue Argentina Peso 93.4300 - 0.10 Peru

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