Shane Romig
Of DOW JONES NEWSWIRES
BUENOS AIRES (Dow Jones)-- Argentine stock and bond markets were quiet Friday ahead of Sunday's key midterm elections, but the peso came under renewed selling pressure.
The peso slid to 3.8000 to the dollar from 3.7950.
The peso has maintained a measured, but steady slide since September 2008, when economic growth started to slow and Argentines started flocking to dollars as a familiar safe-haven.
The peso is now trading at levels not seen since right after the devaluation of the currency in 2002 amid a debt default and economic crisis.
The Central Bank had to step in with heavy dollar selling again Friday to meet strong demand for the greenback, Puente Hermanos said in a market note. Low dollar selling by exporters added to the pressure on the peso, Puente Hermanos said.
Meanwhile stock and bond trade was muted ahead of an uncertain outcome in Sunday's Congressional elections.
Argentina's Merval Index shed 0.06% to close at 1,579.99 points. Volume was low at 27 million pesos.
Shares traded "without a defined tendency during the last session of the week in anticipation of the vote," Portfolio Personal said in a market comment.
The benchmark peso-denominated bond was unchanged in price terms at ARS67.50, to yield 16.49%.
The dollar-denominated Boden 2012 inched up 0.06% in price terms to ARS236.65%, to yield 28.15%.
The election is largely seen as a referendum on the record of Argentine President Cristina Fernandez and Kirchner, her husband, who ran the country from 2003-2007. Polls indicate Fernandez' party will fall well short of the 45% of the vote garnered in 2007, and that it stands a good chance of losing its majority in Congress.
Faced with signs of falling support for the ruling Victory Front Party, Kirchner is heading a list of congressional candidates in the key province of Buenos Aires and has pulled out all the stops to try and hold their majority in both chambers.
But polls provide little insight into how the vote will come out.
Five out of nine recent polls show a win for Kirchner's list, while the other four give opposition leader Francisco de Narvaez of the Union Pro party a slight edge.
Roughly half of the seats in the Lower House of Congress and one third in the Senate are at stake.
-By Shane Romig, Dow Jones Newswires; 54-11-4103-6738; shane.romig@dowjones.com
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(END) Dow Jones Newswires
June 26, 2009 16:57 ET (20:57 GMT)
Copyright 2009 Dow Jones & Company, Inc.
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