EMERGING MARKETS-Latam assets sink; Mexico in focus after president tests positive for COVID-19

    * Mexican peso falls as much as 0.4%
    * Brazil holiday keeps trading volumes low
    * Latam stocks lag EM peers

    By Ambar Warrick
    Jan 25 (Reuters) - Latin American currencies weakened
against the dollar on Monday as a spike in regional COVID-19
cases hurt appetite for risk-driven assets, with the focus
turning to Mexico after President Andres Manuel Lopez Obrador
tested positive for the virus. 
    Mexico's peso dropped as much as 0.4% after the news
on Sunday, which came after the country's worst weekly toll from
the pandemic.
    While the country has been racing to kick-start a vaccine
program, its hospitals are operating at near full capacity in
the face of record-high infection spreads.
    Still, data showed Mexico's economy grew 0.9% in November
from October. The figure pointed to some strength in the Mexican
economy, with analysts positing a sustained recovery this year.

    "Following the record-breaking 18.0% year-on-year
contraction in 1H2020, the economy recovered a significant part
of the losses in 2H2020. The recovery is expected to continue in
2021," Goldman Sachs analysts wrote in a note.
    "We expect real GDP to contract 8.3% in 2020 (adding to the
0.1% decline in 2019) and to grow 3.8% in 2021, with the growth
momentum skewed towards 2H2021."
    Weakness in crude markets weighed on commodity-reliant
currencies, with Colombia's peso dropping about 0.6% to
the dollar.
    Concerns over fiscal spending and mismanagement of the
pandemic have sullied the outlook for Latam currencies this
year, with most units trading negative so far. They have also
lagged their broader emerging market peers.
    Chile's peso fell about 0.6%, despite a gain in the
price of copper, the country's largest export. A  poll last week
saw traders positioning for record-low interest rates in the
country through this year.
    Latam stocks retreated for the day, falling
about 0.2%. They have also lagged their broader emerging market
peers so far this year, due to waning demand for Latam risk
    Brazilian markets were closed for a holiday.
    Key Latin American stock indexes and currencies:
                              Latest    Daily % change
 MSCI Emerging Markets         1408.02             1.09
 MSCI LatAm                    2363.33             -0.2
 Mexico IPC                          -                -
 Chile IPSA                    4527.64             1.04
 Argentina MerVal                    -                -
 Colombia COLCAP               1418.98                - Currencies             Latest    Daily % change
 Mexico peso                   20.0367            -0.37
 Chile peso                      731.9            -0.53
 Colombia peso                 3552.28            -0.75
 Peru sol                       3.6338             0.00
 Argentina peso                86.9000            -0.38

 (Reporting by Ambar Warrick in Bengaluru; Editing by Andrea