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EMERGING MARKETS-Latam FX slide, Brazil's real hits all-time low

Susan Mathew

Feb 7 (Reuters) - Brazil's real hit an all-time low on Friday, and other Latin American currencies also weakened, in line with their broader emerging market peers as the mounting death toll from the deadly new coronavirus dented investor sentiment. The real fell half a percent to 4.303 per dollar as traders tested the central bank's resolve not to intervene in the market to arrest its decline. Data showed that inflation in January posted its smallest rise since 1994. The currency extended losses after the central bank cut rates to new lows late on Wednesday.

"The historically low key rate remains a burdening factor for the BRL, especially since the real interest rate is now close to zero," wrote You-Na Park-Heger, an analyst at Commerbank. "We therefore see no scope for a recovery in the BRL for the time being," she said, adding that a moderate pick-up in the currency can be expected in the second half of the year as the government's reform efforts take effect and as the economy gradually recovers. Other regional currencies were well in the red against a steady dollar. U.S. data showing job creation grew much more than expected in January barely elicited a reaction from the greenback as it was tempered by expectations of a slowdown in February as the coronavirus disrupts supply chains.

The death toll from the virus climbed to 636 and the number of infected cases rose above 30,000 in China, hitting commodity prices and prompting warnings from companies regarding production suspensions and falling demand from China.

Falling oil prices knocked 0.7% off the Colombian peso and put it on course for its third consecutive day of losses, while Mexico's peso fell 0.4%. The Chilean peso gave up 0.7% as copper prices slipped. Data showed Chile copper export revenue jumped 8.3% in January. The country is the world's top producer of the red metal. Separate data showed Chile's annual inflation hit 3.5%, rising toward the upper end of the central bank's 2% to 4% range. Brazil stocks fell 0.4% as iron ore miner Vale weighed. Fashion retailer Lojas Renner SA topped the index after reporting an almost 17% jump in its fourth-quarter net income.

Key Latin American stock indexes and currencies at 1426 GMT:

Stock indexes Latest Daily %

change

MSCI Emerging Markets 1092.96 -0.86MSCI LatAm 2777.83 -0.9Brazil Bovespa 114737.27 -0.39Mexico IPC - -Chile IPSA 4677.66 -0.47Argentina MerVal 41210.84 0.745Colombia COLCAP - -Currencies Latest Daily %

change

Brazil real 4.3029 -0.41Mexico peso 18.7375 -0.44Chile peso 789.3 -0.70Colombia peso 3401.06 -0.68Peru sol 3.3828 -0.24Argentina peso 60.7400 -0.09

(interbank)

(Reporting by Susan Mathew in Bengaluru;)