* EMFX pressured by high U.S. yields
* Latam stocks trade flat
* Oil strength limits losses in Mexican, Colombian FX
(Adds details, updates prices)
By Susan Mathew and Ambar Warrick
Feb 17 (Reuters) - Brazil's real led losses across Latin
American currencies on Wednesday in catch-up trade, with other
units joining a broader downtrend in risk-driven assets as
strength in U.S. yields and the dollar weighed.
The real dropped 1% after logging little movement
over the past few sessions due to a public holiday.
Most other emerging market currencies retreated as U.S.
Treasury yields rose on expectations of increased inflation,
amid higher commodity prices and increased fiscal spending.
This in turn pushed the dollar to a one-month highs, while
an index of emerging market currencies fell
0.3%.
"Given the magnitude of the yield backup, we would expect
currency markets to be fixated on this space in the near term,"
said Mazen Issa, senior FX strategist at TD Securities.
"There may be a worry from here that if we continue to see
rates backup further - particularly real rates - that equities
could roll over."
Latam stocks were flat on Wednesday, mirroring their broader
peers. Stretched fiscal spending and a delay in COVID-19 vaccine
rollouts in Latam has seen the region's assets lag emerging
markets this year.
Mexico's peso weakened as much as 1%, with markets
also keeping an eye on manufacturing hit by a deep freeze in
Texas.
Factories across parts of northern Mexico on Tuesday
reported $2.7 billion in losses from blackouts that extended to
a second day on limited natural gas supplies from Texas, where a
rare winter freeze has left millions of customers without light
or heat.
"The dimension of the effects at the national level can be
significant for the industry, as it comes at a time when the
(Mexican) economy is just starting to recover," Citigroup
strategists said in a note.
But strength in crude markets limited losses in the peso,
while Colombia's currency also fared better than most of
its peers.
Chile's peso reversed initial losses to hit a near
one-month high, taking some support from recent gains in copper
prices. The Argentine peso returned from an extended
weekend to slide further into record low territory.
Key Latin American stock indexes and currencies:
Latest Daily % change
MSCI Emerging Markets 1443.91 0.12
MSCI LatAm 2413.69 -0.17
Brazil Bovespa 120541.45 0.93
Mexico IPC 44962.99 0.59
Chile IPSA 4557.01 -2.06
Argentina MerVal 51999.58 1.036
Colombia COLCAP 1356.36 -0.5 Currencies Latest Daily % change
Brazil real 5.4240 -0.94
Mexico peso 20.1927 -0.30
Chile peso 713.2 0.72
Colombia peso 3525.7 -0.15
Peru sol 3.6508 0.02
Argentina peso 88.9400 -0.45
(interbank)
(Reporting by Susan Mathew in Bengaluru; editing by Jonathan
Oatis)
