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EMERGING MARKETS-Latam FX, stocks mostly weaker; Argentina peso jumps

Susan Mathew

(Adds Morgan Stanley and Citi comments, updates prices) April 29 (Reuters) - Most Latin American currencies weakened on Monday against a softer dollar, while the Argentine peso posted its biggest one-day gain in six months after the central bank said it would ease limits on its foreign exchange market interventions. Mexico's peso and Brazil's real both fell over 0.3%, while Chile's peso logged its ninth day of declines in ten as prices of copper - Chile's main export, fell.

Volatile oil prices took their toll on net crude exporter Colombia's currency which touched its lowest since early January. Peru's sol, however, climbed and had its best day in two months. Morgan Stanley analysts have turned neutral from bullish on emerging market currencies. "Some elements of our bullish view came together, such as a dovish U.S. Federal Reserve and a stabilization in China. Yet, EM has not picked up and new risks have come onto the horizon," they wrote, pointing to fragile U.S.-Europe trade relations and rise in oil prices hurting crude importers as some key risks. Argentina's troubled currency soared 3.7%, and clocked its biggest intraday gain since early October as the central bank's decision to ease limits on intervention signaled its willingness to sell reserves to better control the currency's volatility. This was previously not allowed under the country's $56 billion standby financing deal with the International Monetary Fund and gives the bank more freedom to support the peso by loosening a no-intervention peso trading band that had been in place since October. But analysts at Citi research expect Argentina to remain under pressure into early August, and warn of contagion from Latam's third largest economy. As economic indicators showed deterioration, the peso - which lost half its value against the dollar last year - slumped, prompting Argentina to take measures to plug the currency's fall. This has resulted in the currency seeing very volatile sessions recently. Buenos Aires listed stocks slid nearly 4% on broad-based losses. Other regional stock indices closed flat to lower. Brazil's Bovespa closed marginally lower as a near 6% jump in pharmaceutical firm Hypera SA was outweighed by losses among lenders. Colombian stocks fell 0.4%, with shares of energy company Ecopetrol SA down 0.5% as one of its pipelines was again bombed. The country's Trasandino oil pipeline was bombed late on Friday, spilling crude into a nearby stream in the seventh time it has been attacked this year.

Key Latin American stock indexes and currencies at 2100 GMT:

Stock indexes Latest Daily %


MSCI Emerging Markets 1082.91 0.45MSCI LatAm 2761.63 -0.39Brazil Bovespa 96187.75 -0.05Mexico IPC 44956.73 -0.04Chile IPSA 5169.86 -0.42Argentina MerVal 28827.37 -3.91Colombia IGBC 12872.97 -0.38Currencies Latest Daily %


Brazil real 3.9442 -0.37Mexico peso 19.0135 -0.343Chile peso 679.5 -0.74Colombia peso 3248.45 -0.67Peru sol 3.31 0.15Argentina peso 44.3500 3.61


(Reporting by Susan Mathew in Bengaluru; Editing by Richard Chang)