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EMERGING MARKETS-Latam stocks gain on positive U.S.-China trade comments

Sruthi Shankar

Oct 10 (Reuters) - Latin American stocks gained on Thursday as investors rushed to buy risky assets, encouraged by signs that Washington and Beijing could reach a trade deal, while most currencies in the region steadied against a soft dollar. Brazil's Bovespa jumped 0.8%, while an index of emerging market stocks rose 0.5% after U.S. President Donald Trump confirmed he would meet Chinese Vice Premier Liu He on Friday for further trade talks. That added to optimism following a report China was willing to reach a deal, while an official from the U.S. Chamber of Commerce said there was a currency agreement was possible.

Washington has threatened further tariffs on $250 billion worth of Chinese goods on Oct. 15. "It needs to be seen if this initiative allows China and the U.S. to reach an agreement allowing a postponement of further tariffs or even a reduction of already implemented tariffs," Morgan Stanley analysts wrote in a note. "But the renewed focus on the currency... takes the focus back to (dollar) overvaluation," the note added. In Washington, top trade negotiators met for the first time since late July, seeking to hammer out a deal to end their 15-month trade war that has hit the global economy. Brazil's real rose the least among its Latin American peers as slower-than-expected rise in August retail sales raised concerns about the economy's recovery, even as the dollar softened against a basket of major currencies. Brazil's latest numbers followed data on Wednesday that showed consumer price inflation in September fell to its lowest in more than a year, increasing chances for a third rate cut this year. The Mexican, the Chilean and the Colombian pesos all gained about 0.3%. Minutes from the Bank of Mexico's latest policy meeting showed two members of the five-member board wanted a 50 basis point interest rate cut in September instead of the 25 basis point cut by the central bank. The minutes followed data on Wednesday showing consumer prices cooled for a fifth straight month in September.

Key Latin American stock indexes and currencies at 1424 GMT:

Stock indexes Latest Daily %

change

MSCI Emerging Markets 998.06 0.51MSCI LatAm 2653.00 0.76Brazil Bovespa 102052.03 0.79Mexico IPC 42833.07 0.78Chile IPSA 5038.80 0.12Argentina MerVal 30592.42 0.838Colombia IGBC 12954.43 0.36Currencies Latest Daily %

change

Brazil real 4.1026 0.20Mexico peso 19.4980 0.33Chile peso 720.6 0.32Colombia peso 3455.63 0.24Peru sol 3.363 0.09Argentina peso (interbank) 57.9850 0.01

(Reporting by Sruthi Shankar in Bengaluru)