EMERGING MARKETS-Brazilian real posts strongest gains among Latam currencies; stocks mixed

Medha Singh

stocks mixed@

* Brazilian real firms at 4.05 against dollar

* Chilean peso at highest levels since early Nov.

* MSCI's Latam FX, stock indexes on pace for 4th weekly gain

(Recasts, adds quote, updates prices) Dec 26 (Reuters) - Brazil's real firmed against a tepid dollar on Thursday, leading gains among most Latin American currencies, while stocks in the region were mixed in thin volume after Christmas. The real ticked to its highest level in seven weeks against the dollar after a two-day holiday. The Brazilian currency has recently benefited from an improved outlook for the country. S&P Global Ratings could boost Brazil's sovereign rating if a cut in its deficit as a percentage of GDP is confirmed, the credit firm's lead analyst for the country said, helping support the rise in the real. "We have an overweight on Brazil in Latam," said Jin Zhang, portfolio manager and senior research analyst at Vontobel Quality Growth, adding that the Latin American country "is very much on the right track on reforms." The Chilean peso traded at levels not seen since early November. A monthly poll of 61 traders showed the central bank is expected to maintain Chile's interest rate at 1.75% for the next 12 months until at least January 2021. The Chilean peso, Colombia peso and real were on track for gains in the holiday-shortened week. Among stocks, Argentina's Merval index outperformed its regional peers with its 7% jump, eyeing its biggest one-day percentage surge in nearly four months. Brazilian shares advanced 0.5% while Chile's stock index dropped more than 1%. MSCI's indexes of Latin American currencies and stocks were looking at their best monthly percentage gain in 11 months as dissipating U.S. trade tensions improved investor confidence in global growth and raised demand for riskier bets.

Key Latin American stock indexes and currencies at 1848 GMT:

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(Reporting by Medha Singh and Shreyashi Sanyal in Bengaluru; Editing by Cynthia Osterman)