Strike fears keep Argentina peso weak, bonds firmer

jueves 24 de abril de 2008 17:56 ART
 

BUENOS AIRES, April 24 (Reuters) - Argentina's peso currency languished at its lowest levels for five years on Wednesday in a session marked by persistent investor caution over tense negotiations between farmers and the government.

Farmers staged a three-week strike in March, causing food shortages and a major political crisis. They agreed to spend April in talks, but the talks have become increasingly tense, raising the specter of another strike.

In informal trade between foreign exchange houses, as measured by Reuters, the peso ARSB= dipped 0.16 percent to close at 3.2425/3.25 per dollar.

So far this month, it has weakened by about 1.7 percent, bucking the trend in a region where local currencies are firming against the dollar.

In formal interbank trade ARS=RASL, where the central bank intervenes to stabilize the currency, the peso inched down 0.08 percent to 3.1825/3.185 per dollar.

"The basis of the market is dollar-buying. There's interest in getting rid of pesos and buying dollars, or euros too," said one currency trader. "There's a lot of political noise these days .. the people who have got money get alarmed and try to cover their backs."

On the debt market, Argentine bonds <AR/BONOS> traded locally recovered slightly for a second straight session due to buying by bargain hunters, ending the day with an average gain of 0.5 percent.

The peso-denominated Par paper led the gainers, rising 0.8 percent ARPARP=RASL.

The benchmark MerVal stock index .MERV dropped 0.51 percent to close at 2,129.47, dragged down by the fall in global crude prices that hit heavily-weighted energy-related stocks.

Among the MerVal's biggest losers was steelmaker Tenaris TENA.BA, the world's top producer of seamless steel tubes for the energy industry. Its stock fell 2.85 percent to 85.2 pesos per share.

On the broad market, volume was strong at $80.7 million. (Reporting by Jorge Otaola and Walter Bianchi; Writing by Helen Popper; Editing by Diane Craft)