*

Argentina's Milei touts rare government surplus

*

Colombia predicts $10 bln in foreign investment from

Europe this

year-minister

*

Mexican peso rises after three days of losses

*

Latam FX up 1%, stocks add 1.1%

(Updated at 3:30pm ET/1930 GMT)

By Bansari Mayur Kamdar

April 23 (Reuters) - Latin American currencies extended

gains for a third straight session on Tuesday as investors grew

less cautious about risk assets and a softer U.S. dollar

relieved pressure on emerging markets.

MSCI's index for Latin American currencies

jumped 1% as the dollar index fell 0.4%.

Mexico's peso led regional gains, rising 1% to 16.969

per dollar after a three-session decline.

"The peso remains extremely over valued vs history and EM

peers, but the positive drivers from a robust US economy likely

outweigh the negative impact of a stronger dollar," said Jon

Harrison, managing director of EM macro strategy at GlobalData

TS Lombard, in a note.

Concerns around a major re-escalation of Middle East

tensions abated, and U.S. Treasury yields eased after data

showed U.S. business activity cooled.

Emerging market currencies have struggled against gains

in the dollar and Treasury yields in past weeks, as traders

continue to postpone expectations for U.S. interest rate cuts

this year.

Investors awaited inflation data in Mexico due later this

week.

A basket of Latin American stocks jumped

1.1%.

Mexican breadmaker Bimbo shares lost 2% after

the breadmaker said first-quarter net profit fell 42% from a

year earlier, citing the impact of a strong peso and weaker

spending in its North American markets.

Shares of Mexican airline Volaris jumped as much

as 14% after it posted a first-quarter net profit. The stock was

last up 4.8%.

Brazil's real and Colombia's peso climbed 0.8%

and 0.2% against the greenback.

Colombia expects to attract $10 billion in foreign

investment from Europe this year, especially in renewable

energy, Finance Minister Ricardo Bonilla said.

However, Chile's peso and Peru's sol each

lost about 0.3% as copper prices slipped. Both countries are top

copper producers.

Foreigners

added about $32.7 billion to emerging market portfolios in

March, a fifth consecutive month of overall foreign net inflows

including stocks and bonds, the Institute of International

Finance said.

In Argentina, economic activity decreased 3.2% in February

from a year earlier, less than forecast, official data showed.

Hungary's central bank cited "no need to rush" with further

rate cuts after lowering its base rate by 50 basis points, as

expected.

Egyptian authorities have committed to ending direct

borrowings from the central bank, the International Monetary

Fund said in a staff report.

HIGHLIGHTS:

** ANALYSIS-Argentina's Milei revs up chainsaw and blender

in fiscal deficit attack

** Ecuador scoping out new debt-for-nature swaps - sources

** Indian regulator finds Adani offshore investors in

disclosure rules violation: sources

Key Latin American stock indexes and currencies at 1930 GMT:

Latest Daily %

change

MSCI Emerging Markets 1020.71 0.88

MSCI LatAm 2450.63 1.11

Brazil Bovespa 125489.50 -0.07

Mexico IPC 56835.91 0.5

Chile IPSA 6463.91 1.54

Argentina MerVal 1253205.54 -1.196

Colombia COLCAP 1349.25 0.37

Currencies Latest Daily %

change

Brazil real 5.1283 0.79

Mexico peso 16.9690 0.96

Chile peso 954.3 -0.28

Colombia peso 3907.09 0.15

Peru sol 3.6953 -0.27

Argentina peso 872.5000 0.00

(interbank)

Argentina peso 1010 2.48

(parallel)