(Updates with final prices, details from Mexico) SAO PAULO, Nov 29 (Reuters) - Brazil's stocks and currency fell on Wednesday, extending a recent trend of heightened volatility as traders seek new clues about the likelihood that Congress will approve a plan to streamline the social security system. Chief of Staff Eliseu Padilha said Brazil's government is unwilling to further water down the controversial bill, after repeatedly doing so in order to garner lawmaker support.
His remarks worried traders who feared Brazilian President Michel Temer's administration will not manage to get enough votes with the measure, which they see as critical to boosting long-term economic growth, as it stands. "The market read this as a sign that the government has no resources left to convince lawmakers to vote for the plan," said a trader at a São Paulo-based brokerage. The current version of the pension reform plan would generate fiscal savings of around 60 percent of the government's original proposal. Brazil's benchmark Bovespa stock index fell nearly 2 percent, leading losses among equity markets in Latin America on declines in blue-chips such as lenders Itaú Unibanco Holding SA , Bradesco SA and state-controlled oil company Petróleo Brasileiro SA. The Brazilian real dropped 1 percent, while the Chilean, Colombian and Mexican pesos also fell. Mexico's stock index rose 0.83 percent after four consecutive days of decline took it to eight month lows. Strong U.S. third-quarter growth data and signs of progress in U.S. Republicans' efforts to get a tax bill passed fueled expectations of inflationary pressure in the United States which could force the Federal Reserve to hike interest rates. Higher rates could dampen demand for emerging market currencies, which typically lure foreign investors with high yields.
Key Latin American stock indexes and currencies at 2220 GMT:
Stock indexes Latest Daily YTD pct pct
MSCI Emerging Markets 1,141.38 -0.45 32.37 MSCI LatAm 2,780.93 -0.92 18.81 Brazil Bovespa 72,700.45 -1.94 20.71 Mexico S&P/BVM IPC 47,622.93 0.83 4.34 Chile IPSA 5,012.60 -0.96 20.75 Chile IGPA 25,216.59 -0.91 21.62 Argentina MerVal 26,902.88 -0.03 59.02 Colombia IGBC 10,848.46 0.39 7.11 Venezuela IBC 1,167.21 37.07 -96.32 Currencies Latest Daily YTD pct pct
Brazil real 3.246 -1.04 0.10 Mexico peso 18.5650 -0.12 11.74 Chile peso 643.5 -0.34 4.23 Colombia peso 3,006.00 -0.46 -0.15 Peru sol 3.234 -0.03 5.57 Argentina peso (interbank) 17.425 -0.26 -8.90 Argentina peso (parallel) 18.07 0.11 -6.92
(Reporting by Bruno Federowski, editing by G Crosse)