EMERGING MARKETS-Brazil real and Mexican peso dip on China, G20


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Thu Nov 11, 2010 8:52am EST

By Samantha Pearson

SAO PAULO, Nov 11 (Reuters) – The Brazilian real and the Mexican peso edged lower early on Thursday as traders grew cautious about the growth of the Chinese economy and rising tensions over currency imbalances.

Inflation in China, Brazil’s top trading partner, sped to a 25-month high in October while the country’s industrial production grew about 13 percent that month.

Although the data boosted the price of many commodities, it raised fears that China could take further steps to slow down its economy.

Traders were also uneasy about the ongoing Group of 20 nations meeting in South Korea, which is to tackle growing tensions over currency imbalances.

“As well as evaluating the repercussions from the Chinese economic data released earlier this morning, global players will continue to remain alert to the currency issue, the main focus of the G20 discussions,” said Miriam Tavares, currency director at brokerage AGK Corretora in Sao Paulo.

Renewed concerns about euro-zone debt also kept investors nervous.

On the Brazilian spot market, the bid quote for the real BRBY weakened 0.23 percent to 1.713 against the U.S. dollar.

Speaking in South Korea, Finance Minister Guido Mantega said Brazil would take further measures if needed to curb the real’s appreciation.

The weak U.S. dollar has caused much resentment among emerging economies such as Brazil, where officials complain the dollar is boosting their own currencies and making life difficult for local exporters.

The Mexican currency MXN= weakened 0.33 percent to 12.2526 per dollar.

The Chilean peso CLP= firmed 0.33 percent to 479.40 per dollar as the price of copper, Chile’s main export, hit a record high following the Chinese data. [ID:nLDE6AA1CJ] (Editing by Padraic Cassidy)

Source: routers.com

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