ARGENTINA: Peso Headed For 3rd Year As Worst Latin Currency On Deficit Fears.

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     For the first time in a decade, Argentina may post a current account deficit next year, further weakening the peso, making it Latin America’s worst-performing currency for a third-straight year.
    Most economists predict the peso will slide 8 percent to 4.29 per dollar by the end of 2011.
   As imports exceed imports, Argentina may report its first current account deficit since 2001.
    President Kirchner may seek a weaker peso next year to curb rising imports, bolster exports and avert a current account deficit.
    Currently, the peso is 3.9744 per dollar, down 4.4 percent for 2010.

ARGENTINA/ BRASIL: Weak Peso, Strong Real Fanning Inflation.

REUTERS/  By Drew Benson /   A Goldman Sachs economist says the peso’s slide to a record low against Brasil's real is boosting exports of cars and wheat there and stoking an inflation that may hit at least  25% this year.
     Argentina's GDP may hit 9.5 % this year, its fastest pace since 1992, as the weaker peso helps boost exports but also feed the highest inflation in the world after Venezuela.
    Economist Alberto Ramos warns: “The economy is growing on steroids, generating a lot of inflation. This is not a sustainable cycle. They want to stimulate net exports, not through genuine productivity gains, but by giving them a competitive exchange rate.” Most economists forecast that Argentina’s peso will fall to 4.10 per dollar by the end of the year, from 3.9513 today.

BRASIL/ARGENTINA: Trade War Threatens Recovery.

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Brasil has responded to recent Argentine import restrictions by blocking the entry of 500 trucks carrying apples, pears and French fries for McDonald’s restaurants. “These trade wars between neighbors are counterproductive for both sides, but Argentina has more to lose,” said analyst Boris Segura.
Argentina’s economy, South America’s second-largest after Brazil, may grow 2 percent in 2010 after shrinking 3.5 percent this year while the peso may weaken more should the dispute drag on.