Emerging markets – Forex by Lloyds TSB

Argentinian peso: USD/ARS: The peso, remains under pressure from a long term perspective, but the recent break-out into highs has not been sustained.

Latin America and Central America

• Argentinian peso: USD/ARS: The peso, remains under pressure from a long term perspective, but the recent break-out into highs has not been sustained. This could indicate a more substantial reversal, therefore Q1 2009 targets are at 3.30. A one week close over 3.42 would negate this view.

• Brazilian real: USD/BRL: The real breached major resistance recently, but this has been quickly reversed. A modestly improving scenario for commodities (less negative rather than positive) could assist further appreciation for the Brazilian currency hence 2.20 is the January 2009 target. Stops are on a one week close over 2.45.

• Colombian peso: USD/COP: Having seen a consolidation, a potential reversal is developing here in the form of a head and shoulders top. Look to buy the peso at current levels with a stop and reverse through 2350.

• Chilean peso: USD/CLP: The long term outlook for copper remains of interest and as a broader commodity recovery takes hold, the peso should continue to benefit. Although caution will prevail whilst the market is still very close to key prior highs, a break of 650 is expected with 624 the target. Stop and reverse through 675.

• Mexican peso: USD/MXN: The range continues and despite the bearish peso sentiment, the Bolsa index may have found a short term base. This should push the peso through 13.00 with Q1 2009 targets at 12.44. Stops are on a two week close over 13.65.

• Peruvian sol: USD/PEN: The range continues with resistance at 3.16 and support at 3.08 defining the range. A one week close over either level gives the next trend signal.

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