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Currency index at highest since July

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Brazil debt-to-GDP falls in January

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Indexes set for weekly declines

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Latam FX index up 0.9%, stocks up 3.5%

(Updates with mid-session trading)

By Lisa Pauline Mattackal, Shashwat Chauhan and Purvi

Agarwal

March 14 (Reuters) - Latin American stocks and

currencies saw robust gains on Friday, helped by rising

commodity prices and as investors took a breather from a barrage

of U.S. tariff policy headlines.

MSCI's index for Latin American currencies

was up 0.9%, trading near levels last seen in July, eyeing

slight gains for the week.

"The postponement of U.S. tariffs until 2 April and

favorable political dynamics are generating a constructive

environment for LatAm FX," analysts at Societe Generale wrote,

adding they were "constructive" on Latam currencies.

The Mexican peso, among the most sensitive currencies

to U.S. tariffs, rose 0.8%. U.S. Secretary of State Marco Rubio

said late Thursday that cooperation with Mexican authorities has

improved, but work still needs to be done on curtailing the flow

of illegal drugs.

The real jumped 1% after data showed Brazil's debt to

GDP ratio fell unexpectedly in January. However, retail sales

slipped for a third consecutive month in January.

Despite the signs of a slowdown, Brazil's central bank is

expected to hike rates to a near decade high at its meeting next

week to combat inflation.

"Our sense is that there's just about enough weakness in the

economy to tip Copom towards ending the tightening cycle next

week... but the inflation challenge means there's a very

plausible scenario where they flag one or two more hikes, albeit

of a smaller magnitude," said William Jackson, chief EM

economist at Capital Economics.

Oil prices rose, and gold jumped past the $3,000 per ounce

level for the first time, also aiding currencies and stocks.

Miner Vale gained 3.2%. Brazil's Petrobras

and Colombia's Ecopetrol rose 4.4% and 3.5%,

respectively.

Argentina's Merval leapt 4.5%, while Brazil's

Bovespa was up 2.7%.

MSCI's gauge of regional stocks jumped 3.5%,

set for its best day November 2023. The index saw steep losses

earlier as markets were hit by an escalating global tariff war

and concerns about slowing U.S. and global growth.

Despite volatility, the Latin American stocks index has

gained nearly 13% this year, sharply outperforming the U.S.

benchmark index which has lost 4.4%.

Peru's sol rose 0.3% after the central bank on

Thursday held its benchmark interest rate at 4.75%, as expected.

Elsewhere, Trump said there is a "very good chance" the war

between Russia and Ukraine can end after "productive"

discussions with Russian President Vladimir Putin.

That optimism helped lift stocks in Central and Eastern

Europe, which were further boosted after German political

parties reached an agreement on a key debt deal.

Prices of Ukraine dollar bonds rose.

Data showed Argentina's monthly inflation rate accelerated

to 2.4% in February, in line with analyst estimates.

HIGHLIGHTS

** Donald Trump makes Chinese stocks (somewhat) great again

** Shares in Brazil's Natura &Co dive more than 25% after

quarterly results

** Peru central bank sees strong economic growth, limited

tariff blow

Key Latin American stock indexes and currencies at 2007 GMT:

MSCI Emerging Markets 1120.11 1.27

MSCI LatAm 2092.95 3.51

Brazil Bovespa 129003.05 2.68

Mexico IPC 52505.56 1.21

Chile IPSA 7509 0.79

Argentina Merval 2333215.6 4.53

6

Colombia COLCAP 1620.36 1.77

Brazil real 5.7405 1.01

Mexico peso 19.929 0.75

Chile peso 928.66 0.56

Colombia peso 4097.5 0.73

Peru sol 3.656 0.33

Argentina peso (interbank) 1065.75 0.70

Argentina peso (parallel) 1220 1.23