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EMERGING MARKETS-Mexico peso up on NAFTA talks, uncertainty over U.S. tax cuts

cuts@ (Updates prices) SAO PAULO, Nov 17 (Reuters) - The Mexican peso firmed on Friday amid expectations that ongoing NAFTA talks in Mexico City would adopt a slightly more deliberative tone than in the past and focus on low-impact issues. The peso, up 0.64 percent on the day, was also lifted by a weaker dollar that sank on mounting uncertainty over major tax cuts sought by U.S. President Donald Trump and his Republican allies in Congress. Late on Thursday, Reuters reported that Canada is open to reviewing the North American Free Trade Agreement every five years instead of terminating the deal automatically if it is not renegotiated as the United States has proposed. In a note to clients, Citibanamex said that the current round of NAFTA talks would focus on less controversial topics and Mexico was poised to present creative solutions, which would ease nervousness in the markets. Equities were mixed across the region, with Chile's blue-chip IPSA index up 1.45 percent, as the nation heads into an election weekend in which market darling Sebastian Pinera is expected to deliver a strong performance. Santiago-listed shares in Latam Airlines Group SA, Latin America's largest carrier, jumped more than 3 percent after Deutsche Bank raised its target price on the stock. Chile's banking sector was also performing well after Fitch said the country's largest banks were ready for Basel III liquidity rules. Brazil's Bovespa index also posted gains, helping by solid demand for materials such as iron, as well as WTI and Brent crude oil.

Key Latin American stock indexes and currencies at 2200 GMT.

Stock indexes Latest Daily pct YTD pct change change MSCI Emerging 1,136.45 0.99 31.8

Markets

MSCI LatAm 2,775.74 1.39 18.59 Brazil Bovespa 73,437.28 1.28 21.93 Mexico IPC 47,857.14 0.23 4.85 Chile IPSA 5,391.75 1.45 29.88 Chile IGPA 27,139.76 1.31 30.89 Argentina MerVal 27,128.50 -0.51 60.35 Colombia IGBC 10,817.39 0.62 6.81 Venezuela IBC 685.45 1.74 -97.84 Currencies Latest Daily pct YTD pct change change Brazil real 3.2573 0.10 -0.25 Mexico peso 18.9320 0.64 9.57 Chile peso 625.55 0.64 7.22 Colombia peso 2,997.31 0.47 0.14 Peru sol 3.241 0.15 5.34 Argentina peso 17.4825 0.01 -9.19

(interbank)

Argentina peso 18.04 0.11 -6.76

(parallel)

(Reporting by Gram Slattery; Editing by Meredith Mazzilli and James Dalgleish)