(Updates prices, adds Colombia rate cut)
By Bruno Federowski
SAO PAULO, Jan 29 (Reuters) - Latin American currencies weakened on Monday as prospects of tighter monetary policy throughout developed markets drove investors away from high-yielding assets.
Dutch central bank president Klaas Knot said on Sunday that "there is no reason whatsoever" for the European Central Bank (ECB) to continue its asset purchase program, suggesting years of policy stimulus may be coming to an end sooner than expected.
His remarks added to a growing perception that strong global growth could force policymakers to tighten policy faster in coming months, potentially draining funds away from emerging markets. Some economists expect the Federal Reserve to raise its economic assessment when it concludes its two-day meeting on Wednesday, which would increase the probability that the U.S. central bank raises interest rates four times this year.
The U.S. government's key payrolls report, scheduled for Friday, could also shed further light on the outlook for monetary policy.
Currencies from Chile , Colombia , Mexico and Brazil weakened between 0.26 percent and 0.81 percent, capping a January rally in which all of them posted hefty gains.
Stock markets were mixed, with Brazil's benchmark Bovespa stock index down 1 percent as traders booked profit on recent gains that drove it to all-time highs.
Shares of wood pulp producer Fibria Celulose SA , however, jumped more than 5 percent on a report that Netherlands-based Paper Excellence was considering acquiring it. In Colombia, the central bank unexpectedly lowered the lending rate on Monday, the last cut in its current cycle, as policymakers try to boost a still-sluggish economy even as inflation remains above target.
The seven-member board voted four-to-three to reduce the lending rate by 25 basis points to 4.50 percent, surprising the majority of analysts in a Reuters poll last week, who expected a hold. Key Latin American stock indexes and currencies at 2200 GMT:
Stock indexesLatestdaily % changeYTD % change
MSCI Emerging 1217.670.584.51Markets MSCI LatAm3007.28 -0.326.67 Brazil Bovespa 79831.76 0.14.49 Mexico IPC 49510.150.250.32 Chile IPSA5745.950.223.26 Chile IGPA 28911.170.283.33 Argentina MerVal 33542.68 -0.24 11.56 Colombia IGBC11727.781.473.14 Venezuela IBC 2324.29 17.01 84.01 CurrenciesLatest daily % changeYTD % change
Brazil real3.1650 -0.814.69 Mexico peso 18.6255 -0.73 5.764 Chile peso 603.20 -0.261.90 Colombia peso 2835.93 -0.815.15
Peru sol 3.2150 -0.470.68 Argentina peso19.58 -0.09 -5.01(interbank) Argentina peso19.98 -0.25 -3.75(parallel) (Reporting by Bruno Federowski; Editing by Susan Thomas and Matthew Lewis)
Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.