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EMERGING MARKETS-Latam FX steady as investors gauge Lagarde's nomination to head ECB

Susan Mathew

head ECB@ July 3 (Reuters) - Amid growth worries, Latin American currencies were quiet against a steady dollar on Wednesday as investors gauged the implications of the nomination of the IMF's Christine Lagarde to head the European Central Bank. Markets are hoping that International Monetary Fund head Lagarde will maintain the ECB's recent dovish tone, which was echoed by the U.S. Federal Reserve, and had spurred inflows into riskier assets last month. The nomination of Lagarde is a big surprise, wrote Mark McCormick, global head of FX strategy at TD Securities. "Still, we note the impact has been muted, mostly reflecting the fact that markets have insufficient information to stereotype her expected policy lean." Signals that the United States may be backtracking on its promise to reduce restrictions on Chinese tech giant Huawei and fresh tariffs threats on the European Union on Tuesday had investors worried that the recent slew of poor manufacturing data from across the globe is here to stay. While the currencies of Mexico and Chile barely moved, higher oil prices helped crude exporter Colombia's peso add 0.1%. Brazil's real swung between gains and losses with data showing the country's services sector activity shrank in June for the third month in a row - the clearest warning sign yet that the economy may have slipped back into recession, adding pressure to pass pension reforms seen as crucial in shoring up the economy. Investors are hoping that the bill can be put to vote in the Lower House before the congressional recess begins on July 18, but the final version to be voted on by the House is yet to be passed by a special congressional committee. Sao Paulo-traded stocks rose 0.5% on broad-based gains with financial and consumer stocks leading gains. Stocks in Chile also rose, in line with world stocks.

Key Latin American stock indexes and currencies at 1356 GMT:

Stock indexes Latest Daily %

change

MSCI Emerging Markets 1058.41 -0.49MSCI LatAm 2848.22 0.6Brazil Bovespa 101097.08 0.49Mexico IPC 43433.16 -0.02Chile IPSA 5026.70 0.34Argentina MerVal - -Colombia IGBC 12551.07 -0.06Currencies Latest Daily %

change

Brazil real 3.8402 0.35Mexico peso 19.0305 0.11Chile peso 680.32 -0.08Colombia peso 3206.18 -0.02Peru sol - -Argentina peso - -

(interbank)

(Reporting by Susan Mathew in Bengaluru; Editing by Alistair Bell)