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EMERGING MARKETS-Brazil stocks at record high, but Latam FX subdued by virus woes

    * MSCI Latam stocks index at 10-month high
    * Chilean stocks outperform peers this week

    By Ambar Warrick
    Jan 8 (Reuters) - Brazilian stocks hit a record high on
Friday on expectations of increased stimulus and accommodative
monetary policy, while Latin American currencies eyed weekly
losses in the wake of record-high coronavirus infection rates.
    The Bovespa index rose 0.6% to a record high in
early trade, while the MSCI's index of Latam stocks
 rose 0.9% to a 10-month high, and was set to add
3% this week.
    Chilean stocks were the best weekly performers in
the region as markets bet on a solid economic recovery in the
country this year.
    The Democrats' taking of the U.S. Senate thus week pointed
to increased liquidity measures in the world's largest economy,
boosting the outlook for global equities.
    "Fresh stimulus hopes lifted global stocks over the last 24
hours ... A unified (U.S.) government as the result of the "blue
sweep" victory will smooth the path to more fiscal stimulus.
This points to the reflation trade remaining intact," Mark
Haefele, chief investment officer at UBS Global Wealth
Management wrote in a note.
    But in local foreign exchange markets, this optimism was cut
short as infections in major Latin American economies rose at
record rates.
    This saw many regional currencies mark steep losses on
Thursday, erasing all gains made earlier in the week. Brazil's
real and Mexico's peso both fell more than
1.8% each, while Chile's peso marked its worst day in
nearly seven months.
    "We may be in a consolidation phase for now with respect to
EMFX, but do think that the USD weakness trade has more to
give," Citi analysts wrote in a note.
     Brazil's real rose 1.2% on Friday, tracking a rise in
prices of iron ore, one of the country's top exports. But it was
set for its worst week since late-September.
    While most emerging market currencies are expected to
benefit from a vaccine-driven economic recovery eventually this
year, they still face near-term headwinds from disruptions
caused by the virus.
    For the day, most Latam currencies apart from the real edged
higher. The MSCI's index of regional currencies was set to lose
more than 2% this week.
    The U.S. dollar also saw increased buying after data showed
the economy shed jobs for the first time in eight months.

    
    Key Latin American stock indexes and currencies:
    
                              Latest     Daily % change
 MSCI Emerging Markets         1345.37               1.74
                                        
 MSCI LatAm                    2517.20               0.61
                                        
 Brazil Bovespa              123066.41               0.56
                                        
 Mexico IPC                          -                  -
                                        
 Chile IPSA                    4560.49                0.7
                                        
 Argentina MerVal                    -                  -
                                        
 Colombia COLCAP               1435.74                  - Currencies             Latest     Daily % change
 Brazil real                    5.3325               1.24
                                        
 Mexico peso                   19.9050               0.47
                                        
 Chile peso                      713.6              -0.17
                                        
 Colombia peso                    3468               0.55
 Peru sol                       3.6137               0.17
                                        
 Argentina peso                85.0900              -0.09
 (interbank)                            
                                        
 
 (Reporting by Ambar Warrick in Bengaluru
Editing by Nick Zieminski)
  
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