SAO PAULO, Oct 20 (Reuters) - The Mexican peso tumbled on Friday after the U.S. Senate cleared the way for a tax reform that raised the prospect of a fiscal lift to the U.S. economy that could force interest rates to rise faster. Higher U.S. rates could increase the allure of assets from the world's No. 1 economy, bolstering the value of its currency. The dollar touched a 3-month high against the Japanese yen and a 5-month high against the Swiss franc. All currencies in Latin America were in the red. The Mexican peso, which has seen increased volatility due to the NAFTA negotiations, led the decline. Senate approval of a U.S. budget blueprint on Thursday for the 2018 fiscal year cleared a critical hurdle for Republicans to pursue a tax-cut package without Democratic support.
Investors have also viewed as bullish for the dollar remarks this week from Federal Reserve Chair Janet Yellen and other Fed board members that suggested the central bank is moving forward with another rate hike this year. Latin American stocks, however, traded higher as prices of base metals rebounded from the previous day's slump. Shares of miner Vale SA, the world's largest iron ore miner, added the most points to Brazil's benchmark Bovespa stock index , which rose 0.8 percent on the day. Shares in steelmaker Usinas Siderúrgicas de Minas Gerais SA jumped, in line with rising steel prices due to expectations of global supply cuts. Ratings agency Fitch on Thursday raised the rating of Usiminas, as the firm is known, to "B" from "CCC", with a stable outlook.
Key Latin American stock indexes and currencies at 1445 GMT:
Stock indexes daily % YTD % change change
MSCI Emerging Markets 1120.75 0.34 29.53 MSCI LatAm 2946.65 0.01 25.87 Brazil Bovespa 76861.76 0.76 27.62 Mexico S&P/BVM IPC 50449.39 0.9 10.53 Chile IPSA 5507.70 0.56 32.67 Chile IGPA 27600.12 0.5 33.11 Argentina MerVal 27127.04 1.2 60.35 Colombia IGBC 10941.45 0.01 8.03 Venezuela IBC 572.69 0.23 -98.19 Currencies daily % YTD % change change
Brazil real 3.1904 -0.49 1.84 Mexico peso 19.0140 -1.10 9.10 Chile peso 628.8 -0.59 6.66 Colombia peso 2935.22 -0.59 2.26 Peru sol 3.238 -0.12 5.44 Argentina peso (interbank) 17.4650 -0.03 -9.10 Argentina peso (parallel) 17.93 0.67 -6.19
(Reporting by Bruno Federowski)