EMERGING MARKETS-Latam stocks, FX rise but still on course for worst quarter in a year

    * Brazil set for a near 9% decline in Q1
    * Latam FX gains on the day as dollar weakens
    * Cielo soar after Brazil greenlights WhatsApp payments

 (Adds comments, updates prices throughout)
    By Sruthi Shankar and Shreyashi Sanyal
    March 31 (Reuters) - Latin American currencies and stocks
were on course to close out their worst quarter in a year on
Wednesday as bets of a faster U.S. economic recovery lifted the
dollar and a worsening coronavirus crisis in Brazil hit regional
    The real, among the worst performing EM currencies so
far this year with losses of almost 9%, rose 1.6%.  
    Other regional peers including the Mexican peso, the
Colombian peso and the Chilean peso all rose in a
reversal of this year's trend as the dollar weakened.
    Hawkish signals from the central bank and recent moves by
President Jair Bolsonaro to win support from allies in Congress
amid criticism over his government's handling of the pandemic
supported Brazil's markets recently. 
    However, with the country reporting record COVID-19 deaths,
its public finances and economic activity have taken a heavy
    Data showed the number of people officially out of work in
the three months to January hit its highest since comparable
records began in 2012, while another set showed national debt
rose to a new all-time high of 90% of GDP in February. 

    "We maintain our worse-than-consensus fiscal scenario where
total public spending surpasses the Spending Cap by BRL75
billion (1.0% of GDP) in 2021, but warn that the risks of a
larger fiscal ease are increasing due to the tough Covid-19
situation," Citi analysts wrote in a note.
    Mexico's economy is seen growing at a quick pace in 2021 and
reaching pre-pandemic levels by the beginning of 2022, after
suffering its steepest recession since the Great Depression of
the 1930s last year, the finance ministry said. The Mexican peso
rose 0.5%.
    "The proximity to the U.S. has become a blessing for Mexico
as the country should benefit from the U.S. fiscal stimulus via
several transmission channels, including exports, remittances
and tourism flows," said Gabriela Soni, emerging markets
strategist Mexico at UBS.
    The Chilean peso rose after the central bank on Tuesday kept
its benchmark interest rate steady at 0.5%, in line with
    The central bank also said the economy would grow 6% to 7%
in 2021, a greater expansion than previously predicted, buoyed
by one of the world´s most successful vaccination drives.

    Still, the MSCI index of Latin American currencies
 was on course for a nearly 6% drop in the first
quarter, while its equities counterpart was set
for a 6.3% decline - their worst quarterly losses since March
    Brazil's main Bovespa index slipped after hitting a
one-month high in the previous session as banks weighed.  
    Payment processing company Cielo SA soared 5.5%
after Brazil's central bank allowed Facebook to process
payments through the WhatsApp messaging service, which Cielo has
a partnership with.
    Key Latin American stock indexes and currencies at 1845 GMT:
          Stock indexes                    Latest    Daily %
 MSCI Emerging Markets                      1317.59     -0.14
 MSCI LatAm                                 2299.41      1.03
 Brazil Bovespa                           116343.22     -0.43
 Mexico IPC                                47144.78     -1.59
 Chile IPSA                                 4901.15     -0.55
 Argentina MerVal                          48108.63     0.037
 Colombia COLCAP                            1320.12     -0.54
              Currencies                   Latest    Daily %
 Brazil real                                 5.6469      1.97
 Mexico peso                                20.4580      0.55
 Chile peso                                   719.4      1.26
 Colombia peso                               3660.3      1.83
 Peru sol                                    3.7428      0.75
 Argentina peso (interbank)                 91.9800     -0.02
 Argentina peso (parallel)                      138      2.17
 (Reporting by Sruthi Shankar and Shreyashi Sanyal in Bengaluru
Editing by Alistair Bell and Diane Craft)