SAO PAULO, Oct 26 (Reuters) - Latin American currencies weakened on Thursday on bets that U.S. President Donald Trump would nominate a more hawkish policymaker to replace Janet Yellen as head of the Federal Reserve. However, losses were limited, by the European Central Bank's decision to extend monetary stimulus, albeit at a slower pace. Politico on Thursday reported that Trump's search for the next chair of the Fed has come down to Fed Governor Jerome Powell and Stanford University economist John Taylor. Both are seen as more hawkish than Yellen. The report fanned expectations that U.S. interest rates could rise faster than expected next year, potentially hampering demand for high-yielding assets from emerging markets. Still, that could be partially offset by the ECB's extended stimulus. The bank will cut its bond buys in half to 30 billion euros a month from January, taking comfort in an economic recovery now in its fifth year. But, concerned by stubbornly low inflation, the ECB twinned the cut with a nine-month extension of the program, opting to buy fewer bonds but for a longer period to reassure investors it will provide accommodation for a long time. Currencies from Brazil, Mexico, Chile and Colombia slipped between 0.2 percent and 0.5 percent. The Brazilian real led the losses after President Michel Temer dodged corruption charges in a lower house vote on Wednesday evening, but with a smaller show of support from lawmakers than a similar vote earlier this year. The vote could delay his efforts to pass a pension reform that is seen as critical to boosting long-term growth in the country and curbing government debt.
Key Latin American stock indexes and currencies at 1500 GMT:
Stock indexes daily % YTD % change change
MSCI Emerging Markets 1109.88 -0.38 29.2 MSCI LatAm 2879.99 -0.12 23.19 Brazil Bovespa 76655.49 -0.02 27.28 Mexico S&P/BVM IPC 49365.53 1 8.16 Chile IPSA 5498.08 0.05 32.44 Chile IGPA 27578.44 0.04 33.01 Argentina MerVal 28085.39 0.74 66.01 Colombia IGBC 11002.10 0.42 8.63 Venezuela IBC 717.77 0.97 -97.74 Currencies daily % YTD % change change
Brazil real 3.2604 -0.49 -0.34 Mexico peso 19.0875 -0.22 8.68 Chile peso 629.85 -0.17 6.49 Colombia peso 3007.8 -0.34 -0.21 Peru sol 3.236 -0.06 5.50 Argentina peso (interbank) 17.5200 -0.14 -9.39 Argentina peso (parallel) 18 0.56 -6.56
(Reporting by Bruno Federowski; Editing by Jonathan Oatis)