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EMERGING MARKETS-Mexico peso slips on NAFTA fears, other Latam currencies gain

gain@ (Recasts with peso weakening) SAO PAULO, Oct 13 (Reuters) - Mexico's peso hit a fresh five-month low on Friday on concerns over Mexico's future commerce ties with top trade partner the United States, while other Latin American currencies strengthened. The Trump administration on Friday demanded that U.S.-made content account for half the value of the cars and trucks sold under the North American Free Trade Agreement (NAFTA), adding to doubts about any potential deal to renew the pact. The proposal was made during talks near Washington, in the fourth of seven planned rounds of negotiations to overhaul the treaty. Mexican sources denounced it as "absurd" and unacceptable, underlining the gaps between NAFTA's three members as they try to wrap up a deal by a year-end deadline. The peso, which has weakened as concern for the future of NAFTA has grown, dropped around 0.25 percent. In central bank minutes published on Thursday, a majority of board members recommended maintaining a prudent monetary policy stance due to "adverse scenarios" in Mexican-U.S. ties, which could heighten risks for economic growth and the peso.

Other Latin American currencies firmed after underlying U.S. inflation remained tame in September, casting doubt over the prospect of a December Federal Reserve interest rate hike. The currencies of Brazil, Chile and Colombia firmed between 0.1 and 0.7 percent, supported by expectations that a slow path of U.S. rate hikes could bolster demand for high-yielding assets. Brazil's benchmark Bovespa stock index rose 0.43 percent and hovered around the 77,000 mark, tracking commodity prices higher after stronger-than-expected Chinese trade figures. Preferred shares in Oi SA jumped 23.76 percent after the phone company submitted a debt restructuring plan seen as strongly beneficial to stockholders. Still, analysts warned the plan may not be approved by creditors, who could be forced to take heavy losses on their holdings.

Key Latin American stock indexes and currencies at 2021 GMT:

Stock indexes Latest Daily YTD pct pct change

change

MSCI Emerging Markets 1,126.96 0.48 30.08 MSCI LatAm 2,966.12 0.53 26.05 Brazil Bovespa 76,977.68 0.43 27.81 Mexico IPC 49,969.50 0.01 9.48 Chile IPSA 5,460.47 0.47 31.53 Chile IGPA 27,343.11 0.45 31.87 Argentina MerVal 27,108.55 0.18 60.24 Colombia IGBC 11,057.99 -0.03 9.18 Venezuela IBC 534.01 0.36 -98.32 Currencies Latest Daily YTD pct pct change

change

Brazil real 3.1482 0.66 3.21 Mexico peso 18.9575 -0.30 9.42 Chile peso 622.8 0.22 7.69 Colombia peso 2,933.2 0.22 2.33 Peru sol 3.248 0.15 5.11 Argentina peso 17.3300 0.52 -8.40

(interbank)

Argentina peso 17.85 0.22 -5.77

(parallel)

(Reporting by Bruno Federowski; Editing by Meredith Mazzilli)