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EMERGING MARKETS – Chilean peso hits record high, Czech koruna eases after rate hike

* Chilean Codelco resumes operations despite strike * Czech c.bank raises rates by 125 basis points * Bolsonaro says next CEO will replace Petrobras management By Shreyashi Sanyal June 22 (Reuters) – The Chilean peso hit a record high on Wednesday after workers at copper producer Codelco went on strike, while the Czech koruna eased slightly against the euro after the country’s central bank raised its key rate . The peso was last down 1.5% and hit a historic low of 886.90 against a stronger dollar as workers at the world’s largest copper producer protest the closure of a smelter located in an area with a high level of contamination. Codelco resumed operations despite the strike, the government said. Other emerging market currencies were mostly down, with the MSCI index for Latin American shares down 0.6%. Hurt by the strengthening greenback, fears of a global recession amid aggressive central bank tightening cycles pushed investors out of riskier emerging market currencies. Market participants have been cautiously watching Federal Reserve Chairman Jerome Powell’s congressional testimony on whether another 75 basis point cut is on the table for the July central bank meeting. “Investors will need to see compelling evidence that inflation is slowing before they see a turnaround in market sentiment,” UBS strategists wrote in a client note. The board of the Czech central bank raised its main interest rate by 125 basis points to 7.00%, extending a year-long campaign of policy tightening to tackle peak inflation nearly three decades. The Czech koruna eased a little after the rate decision at 24.73 against the euro. Emerging markets for the rest of the week will be informed of central bank action. Mexico is expected to raise its policy rate by 75 basis points at its meeting on Thursday. The Mexican peso edged up 0.3%. Among other things, Egypt’s central bank is also expected to hike rates, while the Philippines was expected to raise its key rate by 25 basis points in its second hike after starting its tightening cycle in May. Indonesia will also meet, is likely to hold rates, but will start its cycle soon. The Brazilian real weakened 0.9%, reversing almost all of its gains from the previous session. Shares in Sao Paulo fell 1.1%, with a 2% drop in shares of oil producer Petrobras among the main drags. Brazilian President Jair Bolsonaro has said Caio Paes de Andrade, his pick to be Petrobras’ next chief executive, will replace the company’s management when he takes office. Main stock indices and currencies in Latin America at 14:30 GMT: Stock indices Last daily change in % MSCI Emerging Markets 994.24 -2.24 MSCI LatAm 2087.81 -0.73 Brazil Bovespa 99133.38 -0.55 Mexico CPI 47392.99 -1.48 Chile IPSA 5095.17 0.21 Argentina MerVal 85615.754 -1.CAP -0.32 Currencies Last daily change in % Brazilian real 5.1460 0.13 Mexican peso 20.0498 0.33 Chilean peso 889.3 -0.81 Colombian peso 4011.63 -0.02 Peruvian sol 3.7183 -0.25 Argentine peso (interbank) 123.8600 -0.15 Argentine peso (parallel) 219 0.15 Argentine peso (parallel) 219 0.15 to Bengaluru; edited by Angus MacSwan)