EMERGING MARKETS-Mexico peso firms on rate hike bets, weaker U.S. dollar

MEXICO CITY, Feb 22 (Reuters) - Latin American currencies gained on Thursday as the U.S. dollar's rally from a three-year low last week ran out of steam, with the Mexican peso strengthening more than 1 percent on strong bets Mexico's central bank could again hike interest rates. Minutes of the latest monetary policy meeting showed Mexico's central bank board members are concerned about persistent inflation pressures and risks that the local currency could be hammered, adding to consumer price pressures.

Mexico's peso strengthened 1.15 percent on Thursday even as consumer prices in Latin America's second largest economy rose less than expected in early February. "The probability that Banco de Mexico keeps hiking the key interest rate is still high," said Gabriela Siller, head of economic analysis at Banco BASE. Meanwhile, Chile's peso gained nearly 0.5 percent, while the Colombian peso rose 0.65 percent as the greenback fell against a basket of international currencies. Stock markets in Latin America were mostly higher, with Brazil's benchmark Bovespa stock index rising for a seventh straight session. Bank Banco do Brasil rose more than 4 percent after posting strong quarterly earnings.

Key Latin American stock indexes and currencies at 2105 GMT:

Stock indexes Latest Daily YTD pct pct change


MSCI Emerging Markets 1,201.83 -0.65 4.42 MSCI LatAm 3,146.42 0.86 10.31 Brazil Bovespa 86,620.48 0.66 13.37 Mexico IPC 48,950.64 0.86 -0.82 Chile IPSA 5,726.09 0.34 2.90 Chile IGPA 28,711.57 0.27 2.61 Argentina MerVal 33,124.77 0.25 10.17 Colombia IGBC 11,869.75 0.92 4.39 Venezuela IBC 4,681.80 -11 -85.23 Currencies Latest Daily YTD pct pct change


Brazil real 3.2494 -0.05 1.97 Mexico peso 18.6225 1.15 5.78 Chile peso 592.5 0.47 3.74 Colombia peso 2,858 0.65 4.34 Peru sol 3.247 0.22 -0.31 Argentina peso (interbank) 19.9450 -0.10 -6.74 Argentina peso (parallel) 20.02 0.45 -3.95

(Writing by Anthony Esposito; Editing by Tom Brown)