Currencies A. Latina, volatile U.S. economy data

Latin American currencies are unstable show this week to mixed U.S. economic data that casts doubt on the pace of recovery of the greater global economy.

Capital inflows to the region could be affected by what is expected to be a week swing, although foreign exchange earnings from exports tend to maintain a slight appreciation in the regional exchange segment.

The recent weakness of the dollar globally will also influence the appreciation of currencies in the region, at a time when the various governments redouble efforts to maintain the competitiveness of their currencies.

Disparate data on the health of the U.S. economy created new doubts about the strength of the largest global economy, but are contrasted with a GDP growth of that country in the third quarter, marking the first expansion in a year.

"Mostly Latin American currencies will affirm (in) the week for the downtrend of the dollar in the world and genuine currency revenues from export earnings," said Fernando Izzo, an analyst at ABC Mercado de Cambios de Argentina.

He added that "all the region's currencies are revalued, mainly Brazil's currency, is likely to continue although it will continue pending revaluing the dollar in the world."

Brazil recently decided to income taxes of foreign investment in an attempt to slow the appreciation of local currency, but so far so far failed to halt the escalation.

The Brazilian real closed Friday with a fall of 1.42 percent, trading at 1.754 / 1.756 per dollar.

"Strong demand 'for Brazil' has led to greater demand for real, which appreciated the currency. (...) While the dollar is weak worldwide, this behavior has been much more evident in Brazil "said a report by consultancy Datarisk in Buenos Aires.

The dollar closed on Friday its first week of gains after four weeks down, with its best weekly performance since June against a basket of currencies, following the release of U.S. economic data that raised a mixed picture.

ARGENTINA AND CHILE, TREND BALANCED

Despite pressure from the international context, the Argentine peso is balanced by purchases of dollars leading the Central Bank to halt the upward trend in the local currency amid high liquidity.

"The continued weakness of the dollar in the world, reversing capital flight and increased international investment remains speculative downward pressures local exchange rate (appreciation of the peso)," said the consultancy Capital Markets in a report .

Traders said the Argentine Central Bank bought in October from 1,300 to 1,500 million dollars to prevent appreciation of the peso during that month and the currency closed up 0.59 percent.

In the case of Chile, the currency remained broadly unchanged last week, affected by a tax on investments provided by Brazil, and expected a similar trend in the coming days.

"The 2 percent tax that applied to capital inflows Brazil slowed the demand for dollars by investors who drew dollars in Chile to bring to Brazil in search of better performance by interest rate arbitrage," said a dealer in Chile.

He added that a similar trend is expected this week.