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EMERGING MARKETS-Latam FX gains, Chile's peso outperforms on positive data

    * Chilean economy expands in November
    * Brazil, Chilean stocks rise in early trade
    * Oil-sensitive Colombian, Mexican currencies gain

    By Ambar Warrick
    Jan 4 (Reuters) - Chile's peso outpaced its peers on Monday
after economic activity was seen expanding in November, while
other Latin American stocks and currencies marked a strong start
to 2021 on optimism over an economic recovery.
    The currency jumped 1.1% to a 17-month high after
Chile's central bank said economic activity grew in November for
the first time since the coronavirus pandemic arrived in the
South American nation.
    A surge in the prices of copper, the country's top export,
made Chile's peso the only Latin American currency to gain in
2020. Copper prices are also considered a barometer of economic
sentiment, given the red metal's importance in industrial
activity. 
    For the day, broader Latin American currencies rose tracking
weakness in the U.S. dollar and signs of economic expansion in
China. The country is a top trade destination for most of Latin
America.
    "Outlook for the USD remains bearish... the combination of a
collapsed term premium, vaccine implementation and reflation
tactics are fairly dominant forces," Mazen Issa, senior FX
strategist at TD Securities wrote in a note.
    Latin American currencies were also seen as primed for more
upside after severely underperforming their broader emerging
market peers last year.
    Brazil's real, which was one of the worst
performing emerging market currencies last year, rose 0.8% to
the dollar in early trade.
    Data showed the pace of expansion in Brazil's manufacturing
sector decelerated in December to its slowest since July. But
reading was still in expansion territory, indicating that an
economic recovery in Latin America's largest economy was still
ongoing.
    Currencies of oil exporters Mexico and Colombia
 rose tracking recent strength in the crude market, as
markets bet on a recovery in demand and output cuts from the
OPEC.
    Regional stocks also rose for the day, after underperforming
their emerging market peers in 2020. Brazil's Bovespa index
 added about 0.5%, while Chilean stocks rose
1.6%.
    Accommodative monetary policy and increased liquidity
measures are expected to keep investors seeking yields in
equities through the mid-term. 
    Key Latin American stock indexes and currencies:
    
                              Latest     Daily % change
 MSCI Emerging Markets         1307.39               1.21
                                        
 MSCI LatAm                    2483.37               1.29
                                        
 Brazil Bovespa              119661.67               0.54
                                        
 Mexico IPC                          -                  -
                                        
 Chile IPSA                    4244.50               1.61
                                        
 Argentina MerVal                    -                  -
                                        
 Colombia COLCAP                     -                  - Currencies             Latest     Daily % change
 Brazil real                    5.1498               0.79
                                        
 Mexico peso                   19.7424               0.67
                                        
 Chile peso                      702.7               1.14
                                        
 Colombia peso                 3406.52               0.23
 Peru sol                        3.618               0.00
                                        
 Argentina peso                84.6900               0.27
 (interbank)                            
                                        
 

 (Reporting by Ambar Warrick in Bengaluru
Editing by Alistair Bell)
  
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