*

MSCI Latam FX index little changed, stocks up 0.8%

*

Poll: Mexican peso to trade stable in coming months

*

Chile's economic activity unexpectedly down in February

*

Argentina pursues trade deal in Washington as Trump

tariffs loom

By Johann M Cherian

April 1 (Reuters) - Investor mood across Latin America

was fragile on Tuesday, with major currencies in the region

trading in a tight range as investors awaited reciprocal trade

barriers that U.S. President Donald Trump is due to announce.

A report said White House aides have drafted plans for

tariffs of about 20% on most of the $3 trillion of goods

imported annually to the U.S., a move that is likely to hurt

trade-reliant developing economies and escalate a global trade

war.

The plan is likely to be rolled out on Wednesday evening.

An index tracking Latam currencies was flat

against the dollar and investors flocked to safe-haven

currencies such as the Japanese yen.

Mexico's peso hovered at 20.4 to the dollar, while

the local stock index edged up 0.2%.

The second one-month pause to U.S. tariffs on Mexican and

Canadian imports in compliance with existing free trade rules is

also likely to expire later this week.

However, a Reuters poll showed analysts expect the peso to

trade relatively stable in coming months on expectations that

any new U.S. tariffs on Mexican products would be limited in

scope and short-lived and that the two governments would

eventually reach middle ground.

"The reciprocal and products tariffs will likely prompt

varied responses across different countries, ranging from

immediate retaliation to diplomatic negotiations," analysts at

UBS said in a note.

"North America, particularly Canada and Mexico, may adopt a

more diplomatic approach."

Brazil's real dipped 0.1% but has outperformed

regional peers so far into the year with analysts pointing to

the economy being less exposed to trade with the United States.

Data from JP Morgan also showed that the country's dollar

bonds have seen the biggest gains so far in the year, among

major emerging markets.

Chile's peso edged up 0.2%, but gains were limited

as investors assessed data that showed economic activity

unexpectedly fell in February as the world's largest copper

exporter grappled with a major power outage last month.

Fellow copper producer Peru's sol was flat, while

Colombia's peso firmed 0.5%.

On the equities front, MSCI's gauge for regional equities

rose 0.8%, aided by a 0.5% gain in Brazil's

Bovespa index.

Index heavy-weights Petrobras and Vale

added 0.7% and 1.3%, respectively.

Colombia's Colcap index edged up 0.1%, while the

equity benchmarks in Chile added 0.2%.

Argentina's Merval index slipped 0.1%. Investors

awaited any hints about a potential trade deal between the two

economies when the country's foreign minister Gerardo Werthein

meets his U.S. counterpart Marco Rubio on Tuesday.

Despite signs of progress on a new $20 billion International

Monetary Fund program, the Merval index has underperformed peers

in the region as investors awaited clarity on what might happen

to the strict capital controls that have been in place since

2019.

Key Latin American stock indexes and currencies at 1435 GMT:

Latin American market prices

from Reuters

Eq Latest Daily % change

ui

ti

es

MS 1109.26 0.71

CI

Em

er

gi

ng

Ma

rk

et

s

MS 2081.52 0.82

CI

La

tA

m

Br 130986.01 0.56

az

il

Bo

ve

sp

a

Me 52631.02 0.28

xi

co

IP

C

Ch 7663.37 0.19

il

e

IP

SA

Ar 2335429.99 -0.142

ge

nt

in

a

Me

rv

al

Co 1605.14 0.14

lo

mb

ia

CO

LC

AP

Cu Latest Daily % change

rr

en

ci

es

Br 5.7083 -0.06

az

il

re

al

Me 20.423 0.17

xi

co

pe

so

Ch 945.5 0.25

il

e

pe

so

Co 4143.28 0.53

lo

mb

ia

pe

so

Pe 3.6675 0.12

ru

so

l

Ar 1072.75 0.05

ge

nt

in

a

pe

so

(i

nt

er

ba

nk

)

Ar 1295 2.26

ge

nt

in

a

pe

so

(p

ar

al

le

l)