EMERGING MARKETS-Argentine peso slides as central bank allows more volatility; Mexican peso up

 (Updates to close)
    By Susan Mathew
    Oct 2 (Reuters) - Argentina's peso dropped on Friday after
the central bank said it would allow a managed float of the
currency, while most other Latin American units fell as global
sentiment took a hit after U.S. President Donald Trump tested
positive for the novel coronavirus.
    The Argentine peso led losses with the bank
saying it would abandon its current "uniform daily devaluations
and introduce greater volatility" as the gap between the
official exchange rate and the rate quoted in informal currency
markets widened close to 93%.
    The bank said it would offer trades at 76.95 pesos per
dollar at Friday's open, around 0.91% weaker than the close on
Thursday. It also increased the important overnight repo rate to
24%, from the current 19%.
    "Even if the number of measures announced is not low, we do
not expect them to change the current dynamics. The measures are
likely to be seen as insufficient and hence run the risk of
being counterproductive," Citigroup Latam FX strategists said a
    The safe-haven dollar gained traction after Trump and wife,
Melania, contracted the disease just four weeks before U.S.
    Brazil's real, was flat with data showing industrial
output rose, slightly less than expected, continuing a pick-up
after shuddering to a standstill during coronavirus-linked
    A Reuters poll showed that Latam currencies are set to
remain weighed down this quarter by fears about Brazil's public
finances and Mexico's close link to U.S. politics.
    The real was on track for its fourth straight week of
losses, down about 1.7%.
    Mexico's peso continued its recent trend of
outperforming regional peers, up 0.7%, all set to post its
biggest weekly rise in more than four months.
    Currencies of Colombia and Chile declined 0.7%
and 0.2%, respectively.
    Among regional stocks, Sao Paulo shares were weighed
down by shares of oil major Petrobras,
which tracked a slump in crude prices.
    Mexican shares were little changed, while Chilean
stocks jumped almost 1%.
    Latin American stock indexes and currencies at 1900 GMT:
  Stock indexes           Latest   Daily %
 MSCI Emerging Markets    1082.40    -0.22
 MSCI LatAm               1819.09    -0.56
 Brazil Bovespa          94574.15    -0.95
 Mexico IPC              36643.44     0.05
 Chile IPSA               3669.49     0.94
 Argentina MerVal        43263.30    0.809
 Colombia COLCAP          1166.10     0.32
      Currencies          Latest   Daily %
 Brazil real               5.6550    -0.05
 Mexico peso              21.6422     0.84
 Chile peso                 789.1    -0.29
 Colombia peso            3869.75    -0.68
 Peru sol                  3.6177    -0.33
 Argentina peso           76.9400    -0.90
 (Reporting by Susan Mathew in Bengaluru; editing by Grant