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EMERGING MARKETS-Latam currencies jump as emerging markets cheer China stimulus

Agamoni Ghosh

stimulus@ Sept 6 (Reuters) - Latin American currencies rose on Friday as stimulus from China's central bank pumped up emerging markets, while weaker-than-expected U.S. jobs data reinforced bets of an interest rate cut by the Federal Reserve later this month. MSCI's index of Latin American currencies moved 0.7% higher and was on track to record its best week since early February. China's central bank said on Friday it was cutting the amount of cash that banks must hold, also known as reserve requirement ratio (RRR), releasing 900 billion yuan ($126.35 billion) in liquidity to shore up the flagging economy.

"We expect one more RRR cut to be announced in the final quarter of 2019 as the trade war continues to hit the Chinese economy," Iris Pang, economist for greater China at ING, said in a note. Adding to the risk-on sentiment was an increase in bets for a rate cut from the Fed next month, after the release of weaker-than-expected nonfarm jobs data in the U.S. Brazil's real jumped 1%, on track to snap seven consecutive weeks of losses as the central bank stepped in to intervene in foreign exchange markets through the week. Data showed consumer price inflation in Brazil was well contained in August, reinforcing expectations of deeper rate cuts by the central bank as it tries to fire up economic growth.

Mexico's peso was on pace to record its best weekly gains since July 2018, while the Argentine peso was set to see its first weekly gain in eight weeks after the country imposed capital controls. The Argentine peso has been battered since President Mauricio Macri suffered a thumping defeat in primaries at the hands of Alberto Fernandez. Equities in the region moved mostly higher, with Sao Paulo's Bovespa index up 0.4%, as strong gains by financial companies help offset losses from energy stocks. In some relief for battered emerging markets, specialist emerging market investor Ashmore said on Friday it saw its assets under management grow by 24% for the year ending June 30, helped by both inflows and positive market performance.

Latin American stock indexes and currencies at 14:18 GMT

Stock indexes daily % change

Latest

MSCI Emerging Markets 1008.54 0.55MSCI LatAm 2682.32 1.12Brazil Bovespa 102649.08 0.4Mexico IPC 42807.29 0.18Chile IPSA 4835.07 0.36Argentina MerVal 0.00 0Colombia IGBC 12686.85 -0.11Currencies daily % change

Latest

Brazil real 4.0595 1.22Mexico peso 19.5717 0.84Chile peso 710.45 0.70Colombia peso 3357.1 0.52Peru sol 3.3518 0.36Argentina peso 55.7000 0.61

(interbank)

(Reporting by Agamoni Ghosh in Bengaluru; editing by Jonathan Oatis)