By Bruno Federowski
SAO PAULO, Jan 31 (Reuters) - Latin American currencies strengthened on Wednesday, tracking global U.S. dollar weakness after U.S. President Donald Trump sent a mixed message on bipartisan compromise in his first State of the Union address.
Trump called on the U.S. Congress to pass legislation to ensure at least $1.5 trillion in new infrastructure spending, and urged lawmakers to put aside partisan interests but pushed a hard line on immigration. "The lack of specifics (and a more combative tone) has allowed US equity markets and U.S. Treasury bonds to steady and improve after slipping since the start of the week but the U.S. dollar remains on the defensive overall," Scotiabank analysts wrote in a client note.
The new round of weakness came after a period of consolidation earlier this week as markets expected the U.S. Federal Reserve to take a more confident stance about the outlook of the economy but keep policy unchanged. The Fed will publish a policy statement later Wednesday following a two-day meeting.
Currencies from Brazil , Colombia , Mexico and Chile firmed between 0.2 percent and 1 percent as the U.S. dollar headed for its biggest monthly drop in nearly two years against a basket of developed market currencies. Stock markets were mixed with Brazil's benchmark Bovespa index the biggest gainer in the region due to a rally in bank shares.
Banco Santander Brasil SA rose sharply after it beat fourth-quarter earnings estimates and quickly expanded its loan book into higher-margin segments.Shares in other lenders, such as Banco Bradesco SA and Ita?? Unibanco Holding SA , followed along.
Key Latin American stock indexes and currencies at 1630 GMT:Stock indexesdaily %YTD %
change change
LatestMSCI Emerging Markets 1254.33 0.547.7 MSCI LatAm 3202.28 0.9512.16
Brazil Bovespa 85414.091.111.80Mexico IPC 50204.41-0.35 1.72Chile IPSA 5857.25-0.04 5.26
Chile IGPA 29421.710 5.15Argentina MerVal 34857.031.815.94
Colombia IGBC 12210.34-0.45 7.38
Currencies daily %YTD %
change change
Latest Brazil real 3.1730 0.18 4.42
Mexico peso 18.5930 0.98 5.95
Chile peso 601.12 0.92 2.25
Colombia peso 2831.32 0.71 5.32Peru sol 3.215 0.03 0.68
Argentina peso (interbank)19.6250 0.05-5.22 Argentina peso (parallel) 19.91 0.65-3.42 (Reporting by Bruno Federowski; Editing by Jeffrey Benkoe)
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