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EMERGING MARKETS-Trade tensions, growth worries drive Latam assets to 2019 lows

Agamoni Ghosh

lows@ (Recasts, updates prices, adds quote)

* China unveils retaliatory tariffs on U.S. goods

* Trump tells U.S. companies to seek alternatives to China

* Powell says will "act as appropriate" to support growth

* Mexico domestic growth weaker than estimated in second quarter

Aug 23 (Reuters) - Latin American assets fell on Friday to their lowest levels so far this year, as another escalation in the U.S.-China trade war and worries over Mexico's growth kept investors on the edge. Beijing imposed additional tariffs on thousands of U.S. products effective Sept. 1, infuriating U.S. President Donald Trump who hit back by asking U.S. companies to start looking for alternatives to their China operations. The unexpected move in the long drawn-out dispute between the world's two largest economies renewed fears of a global slowdown and prompted a global sell-off in riskier assets. "Even though China's tariffs are smaller than what the U.S. has imposed, the sudden surprise element of it all should cause a risk-off to asset markets globally," Iris Pang, economist, Greater China, ING, said in a note. Latin American currencies, which fell more than 1%, were on course to record a fifth consecutive week of losses with Mexico's peso hitting eight-month lows. Mexican gross domestic product was unchanged in the second quarter from the preceding three months, slightly weaker than a preliminary estimate, showing the economy was even closer to entering a recession in the first half of 2019 than previously anticipated. Other regional currencies like the Brazil's real and Colombia's peso slid over 1%, despite a weaker dollar. Federal Reserve chair Jerome Powell, in a much anticipated speech at an economic symposium at Jackson Hole, said the U.S. central bank would "act as appropriate" to keep the current economic expansion on track, but did not offer a clear indication on future interest rate-cuts. MSCI's index of Latin American stocks shed nearly 3% with heavyweight Bovespa index falling more than 2%. Mexican stocks made the smallest losses. Argentina's peso, which shed nearly 18% last week, extended losses to record a sixth straight week of losses.

Key Latin American stock indexes and currencies at 1905 GMT

Stock indexes daily %Latest changeMSCI Emerging Markets 970.98 -0.48MSCI LatAm 2511.79 -2.95Brazil Bovespa 97818.45 -2.19Mexico IPC 39960.50 -0.46Chile IPSA 4667.70 -1.5Argentina MerVal 26933.98 -3Colombia IGBC 12208.92 -1.28Currencies daily %Latest changeBrazil real 4.1157 -0.94Mexico peso 19.8984 -0.41Chile peso 718.2 -0.65Colombia peso 3421.24 -0.97Peru sol 3.375 -0.03Argentina peso 55.1500 -0.03


(Reporting by Agamoni Ghosh in Bengaluru Editing by Sonya Hepinstall)