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EMERGING MARKETS-Mexico peso turns weaker after earthquake; stock trading suspended

suspended@ SAO PAULO, Sept 19 (Reuters) - The Mexican peso turned weaker on Tuesday after a powerful earthquake hit the south of the country, which made the country's stock exchange suspend trading. The 7.1 magnitude earthquake shook buildings in the capital of Mexico City and sent people fleeing into the street.

The Mexican peso dipped 0.2 percent after firming as much as 0.2 percent earlier. The move decoupled the peso from other Latin American currencies, which had traded mostly flat on the first day of the Federal Reserve's widely awaited two-day meeting. The U.S. central bank is expected to provide further clues on when it will hike interest rates again. Many bet it will also announce it will begin trimming its massive portfolio of assets, another step in its efforts to unwind the extraordinary stimulus set up during the financial crisis. "What we're seeing in the markets is the calm before the storm," Coinvalores trader Paulo Nepomuceno said. Analysts widely expect the pace of policy tightening in the United States to be a major driver of currency moves in emerging markets, which have for years enjoyed steady investor demand as central banks pumped liquidity into developed markets.

Key Latin American stock indexes and currencies at 1900 GMT:

Stock indexes daily % YTD % change change

Latest

MSCI Emerging Markets 1109.66 -0.29 29.07 MSCI LatAm 2990.51 -0.12 27.92 Brazil Bovespa 76018.98 0.04 26.22 Chile IPSA 5202.05 0.81 25.31 Chile IGPA 25973.23 0.73 25.27 Argentina MerVal 24080.86 0.7 42.34 Colombia IGBC 11131.16 -0.33 9.90 Venezuela IBC 436716.72 3.15 1277.43 Currencies daily % YTD % change change

Latest

Brazil real 3.1346 0.00 3.66 Mexico peso 17.7925 -0.18 16.59 Chile peso 624.9 0.00 7.33 Colombia peso 2893.9 0.41 3.72 Peru sol 3.246 -0.06 5.18 Argentina peso (interbank) 17.1350 -0.15 -7.35 Argentina peso (parallel) 17.9 0.11 -6.03

(Reporting by Bruno Federowski; Editing by Chris Reese and Chizu Nomiyama)