(Recasts throughout; updates prices, adds market strategist's quote) June 11 (Reuters) - An index of Latin American stocks touched a two-month high on Tuesday and currencies in the region firmed on easing U.S.-Mexico trade tensions and as signs of more stimulus for China's slowing economy spurred a rally in commodity prices. The MSCI index of Latin American stocks jumped 1.8%, hitting the highest level since April 12. Brazil's Bovespa stock index jumped 1.5%, as iron ore prices rallied on supply concerns and China's move to boost funding for major investment projects helped stock prices of energy and commodity heavyweights. Iron ore miner Vale's shares jumped nearly 6%, posting their biggest percentage gain since Jan. 30. Shares in Petroleo Brasileiro SA gained nearly 2% after Brazil's state-controlled oil company said it had signed a deal with local antitrust regulator CADE regarding the proposed sale of some of its refining installations. Brazil's real firmed nearly 1% after news the country's federal budget committee approved a supplementary credit worth 248.9 billion reais ($64.62 billion) to ensure the government can make payments for social programs and meet other expenses. The bill, which is expected to be up for a vote in a joint session of Congress later Tuesday, is a priority for the government, currently struggling to repair what most economists call an unsustainable public deficit. The gains reflect a rebound for real which was hit on Monday The Mexican peso extended gains after logging its biggest percentage gain in 2019 on Monday on news that Mexico and the United States had struck a migration deal that averted U.S. tariffs of an initial 5% that were set to take effect this week. "Mexican peso definitely benefits from the lowering of trade tensions and that's probably helping the rest of emerging markets as well," said Win Thin global, head of currency strategy at Brown Brothers Harriman in New York. "Commodity prices rising is at the margin positive for stocks." The dollar was on the back foot as investors focused on the upcoming G20 summit for any progress on the U.S.-China trade war that has weighed on global growth. U.S. President Donald Trump said he was ready to impose another round of tariffs on Chinese imports if no progress is made in trade talks with Chinese President Xi Jinping at the G20 summit later this month. A bounce in prices of copper - Chile's main export - put its currency on course to erase Monday's near 1% decline posted on a surprise 50 basis point rate cut by the central bank late on Friday. The Argentine peso rose 0.4%, while the Merval stock index jumped 2.7%, inching toward an all-time high hit in mid-February.
Key Latin American stock indexes and currencies at 1950 GMT:
Stock indexes daily %Latest changeMSCI Emerging Markets 1,032.57 1.03MSCI LatAm 2,795.73 1.8Brazil Bovespa 98,932.22 1.5Mexico IPC 43,680.07 0.16Chile IPSA 5,086.13 1.34Argentina MerVal 37,604.56 3.16Colombia IGBC 12,244.83 0.93Currencies daily %
Brazil real 3.8508 0.85Mexico peso 19.1295 0.46Chile peso 692.7 0.95Colombia peso 3,257 -0.04Peru sol 3.326 0.21Argentina peso (interbank) 44.6950 0.45
(Additional reporting by Susan Mathew in Bengaluru; Editing by Will Dunham and Alistair Bell)