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EMERGING MARKETS-Latam currencies cheer Trump's de-escalating tone on Iran

Susan Mathew

(Updates prices) Jan 8 (Reuters) - Latin American currencies firmed on Wednesday, with Mexico's peso hitting its highest in almost nine months, after U.S. President Donald Trump allayed fears of an escalation in tensions between Washington and Tehran. Speaking from the White House, Trump said no Americans were harmed in Iranian missile attacks on military bases housing U.S. troops in Iraq overnight and suggested Washington might not carry out immediate retaliation. Markets worldwide had seen increased volatility over the last few sessions after the killing of a top Iranian general by the United States on Friday had stoked fears of harsh retaliation from Iran. "Risk assets extended their gains after it was clear (Trump's) speech was de-escalating the U.S.-Iran conflict," said Edward Moya, senior market analyst, OANDA New York. Major Latam currencies gained between 0.2% and 1.5% despite a strong dollar, with Chile's peso in the lead in its second day of gains, attempting to make up for severe losses earlier this week. Chilean consumer prices rose 0.1% in December, the government's statistics agency said on Wednesday, while annual inflation hit the central bank's 3% target. Brazil's real rose to 4.0489 per dollar and Mexico's peso rose 0.6%, while oil exporter Colombia's currency braved sliding oil prices to rise 0.4%. But regional stocks suffered casualties from the decline in oil prices. Brazil's state oil firm Petroleo Brasileiro was the biggest drag on Sao Paulo's bovespa index, while Colombia's Ecopetrol weighed on the COLCAP index. The Colombian index logged its biggest one-day drop in more than a month. Iron ore miner Vale was also among the drags on Brazil's Bovespa as it gave up session gains. A Brazilian state prosecutor expects to bring criminal charges "in the next few days" against Vale over a mining waste dam collapse that killed at least 259 people, Reuters reported on Wednesday.

Chilean stocks traded flat after gaining for five sessions straight when they added 5.2%. Mexican shares bucked the trend, up 0.8%. Cement maker Cemex SAB de CV rose 1.8% after British construction materials firm Breedon Group Plc said it would buy certain UK assets from Cemex for 178 million pounds ($233.79 million). Mexican President Andres Manuel Lopez Obrador said he expects foreign investment to increase as the U.S. Senate is set to approve the U.S.-Mexico-Canada Agreement (USMCA) trade deal.

Key Latin American stock indexes and currencies at 1930 GMT:

Stock indexes Latest Daily %

change

MSCI Emerging Markets 1114.21 -0.15MSCI LatAm 2936.56 0.65Brazil Bovespa 116220.19 -0.38Mexico IPC 44502.29 0.78Chile IPSA 4909.03 -0.09Argentina MerVal 41069.46 -0.112Colombia COLCAP 1650.19 -0.82Currencies Latest Daily %

change

Brazil real 4.0489 0.37Mexico peso 18.7924 0.56Chile peso 757.75 1.46Colombia peso 3242 0.59Peru sol 3.314 0.21Argentina peso 59.8150 -0.31

(interbank)

(Reporting by Susan Mathew in Bengaluru; editing by Nick Macfie)