* Brazil's real down 0.7%, other Latam FX reverse losses
* Brazil stocks set to break 6-day losing streak
* Aeromexico jumps on restructuring deals
(Updates prices)
By Ambar Warrick and Susan Mathew
Jan 28 (Reuters) - Brazil's real slipped on Thursday on
fiscal woes, while other major Latin American currencies cut
losses to trade higher as the dollar sank in choppy trade.
The real lost 0.7%, underperforming regional peers.
Data on Thursday showed a record primary budget deficit in
Brazil last year, as crisis-fighting expenditure saw total
outgoings surge by a third.
This overshadowed data showing declining unemployment rate
as job growth jumped despite coronavirus-induced lockdowns.
The prospect of high government debt and stretched fiscal
spending has reduced appetite for the country's assets. The
rampant spread of the virus has also disrupted economic
activity.
"At this moment the government is under political pressure
that wants the reissue of assistance programs, for which there
are no sources of financing. This exerts psychological pressure
suggesting noncompliance with the budget ceiling," said Sidnei
Nehme, economist and executive director of NGO Corretora.
Mexico's peso recovered from an over five-week low
hit earlier in the session as the greenback lost traction, while
fellow crude exporter Colombia's currency jumped more
than 1% despite declining oil prices.
Concerns over the regional spread of the coronavirus and
slow vaccine rollouts, however, kept sentiment subdued.
The COVID-19 death toll in the Americas reached a million,
with Brazil and Mexico - economic heavyweights in Latin America-
struggling to cope with spiking infections and overloaded
hospitals.
Mexico's central bank stressed the need to attract more
investment, and that the country would continue to face economic
uncertainty in 2021.
Most regional stock indexes declined, with Mexican shares
extending losses to a third straight session.
But shares of Aeromexico rose more than 22%
after the Mexican airline negotiated new contracts with two
labor unions, bringing it closer to accessing a second tranche
of bankruptcy financing.
Brazil's main index looked set to break a six-day
losing streak, up almost 2% with financial stocks in the lead.
Key Latin American stock indexes and currencies at 1432 GMT:
Stock indexes Latest Daily %
change
MSCI Emerging Markets 1352.81 -1.36
MSCI LatAm 2355.66 0.85
Brazil Bovespa 118080.15 1.9
Mexico IPC 44127.35 -0.3
Chile IPSA 4410.92 -0.16
Argentina MerVal 49697.54 -0.546
Colombia COLCAP 1367.68 -0.52
Currencies Latest Daily %
change
Brazil real 5.4401 -0.72
Mexico peso 20.1885 0.45
Chile peso 737.8 0.20
Colombia peso 3558.63 1.28
Peru sol 3.6427 0.03
Argentina peso 87.2000 -0.09
(interbank)
(Additional reporting by Luana Maria Benedito in Brasilia;
editing by Barbara Lewis and Richard Chang)
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