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EMERGING MARKETS-Latam FX hurt by high U.S. yields, real falls in catch-up trade

    * EMFX pressured by high U.S. yields
    * Latam stocks trade flat
    * Oil strength limits losses in Mexican, Colombian FX

 (Adds details, updates prices)
    By Susan Mathew and Ambar Warrick
    Feb 17 (Reuters) - Brazil's real led losses across Latin
American currencies on Wednesday in catch-up trade, with other
units joining a broader downtrend in risk-driven assets as
strength in U.S. yields and the dollar weighed.
    The real dropped 1% after logging little movement
over the past few sessions due to a public holiday. 
    Most other emerging market currencies retreated as U.S.
Treasury yields rose on expectations of increased inflation,
amid higher commodity prices and increased fiscal spending.

    This in turn pushed the dollar to a one-month highs, while
an index of emerging market currencies fell
0.3%.
    "Given the magnitude of the yield backup, we would expect
currency markets to be fixated on this space in the near term,"
said Mazen Issa, senior FX strategist at TD Securities. 
    "There may be a worry from here that if we continue to see
rates backup further - particularly real rates - that equities
could roll over."
    Latam stocks were flat on Wednesday, mirroring their broader
peers. Stretched fiscal spending and a delay in COVID-19 vaccine
rollouts in Latam has seen the region's assets lag emerging
markets this year. 
    Mexico's peso weakened as much as 1%, with markets
also keeping an eye on manufacturing hit by a deep freeze in
Texas. 
    Factories across parts of northern Mexico on Tuesday
reported $2.7 billion in losses from blackouts that extended to
a second day on limited natural gas supplies from Texas, where a
rare winter freeze has left millions of customers without light
or heat.
    "The dimension of the effects at the national level can be
significant for the industry, as it comes at a time when the
(Mexican) economy is just starting to recover," Citigroup
strategists said in a note. 
    But strength in crude markets limited losses in the peso,
while Colombia's currency also fared better than most of
its peers.
    Chile's peso reversed initial losses to hit a near
one-month high, taking some support from recent gains in copper
prices. The Argentine peso returned from an extended
weekend to slide further into record low territory. 

    Key Latin American stock indexes and currencies:
    
                              Latest     Daily % change
 MSCI Emerging Markets         1443.91              0.12
                                        
 MSCI LatAm                    2413.69             -0.17
                                        
 Brazil Bovespa              120541.45              0.93
                                        
 Mexico IPC                   44962.99              0.59
                                        
 Chile IPSA                    4557.01             -2.06
                                        
 Argentina MerVal             51999.58             1.036
                                        
 Colombia COLCAP               1356.36              -0.5 Currencies             Latest     Daily % change
 Brazil real                    5.4240             -0.94
                                        
 Mexico peso                   20.1927             -0.30
                                        
 Chile peso                      713.2              0.72
                                        
 Colombia peso                  3525.7             -0.15
 Peru sol                       3.6508              0.02
                                        
 Argentina peso                88.9400             -0.45
 (interbank)                            
                                        
 
 (Reporting by Susan Mathew in Bengaluru; editing by Jonathan
Oatis)
  
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