EMERGING MARKETS-Commodity-linked Latam FX gains, Brazil's real lags

    * Mexican peso leads gains 
    * Brazil's real falls as economic outlook worsens 

    By Ambar Warrick
    April 19 (Reuters) - Commodity-related Latin American
currencies rose on Monday as increasing hopes of a global
economic recovery pushed up metal and oil prices, but gains were
limited as surging COVID-19 deaths and infections in the region
dented sentiment.
    Mexico's peso and Colombia's peso gained as
oil added to gains made last week. Positive economic data from
the United States and China had boosted optimism.
    The Mexican peso outpaced its peers in early trade
amid growing bets that the country's proximity to the United
States will help it benefit from an economic bounce-back in its
northern neighbor. 
    Chile's peso rose on strength in copper prices, which
neared 10-year highs. 
    But rising COVID-19 infections across Latin America held
back gains, with most currencies lagging their emerging market
peers this year due to their economies taking larger hits from
the pandemic. 
    Brazil's real fell 0.4%, as data showed economic
activity surged in February. But the reading was before a
damaging second wave of infections hit the country.
    The country has faced record-high infection and death rates
ever since, and is currently the third worst struck by the
pandemic, behind India and the United States.
    The Brazilian government's handling of the pandemic also
drew much criticism, and has resulted in a congressional
investigation of President Jair Bolsonaro's response to the
    Brazil's 2022 inflation outlook rose above the central
bank's target, while the growth outlook for this year fell for a
seventh consecutive week.
    "Rising inflation, deterioration of consumer and business
confidence, and increasing restrictions on activity and mobility
due to the intensification of the COVID outbreak are expected to
weaken the growth momentum in March-April, likely leading to a
contraction of real activity in Q2 2021," Goldman Sachs analysts
wrote in a note.
    "We expect activity to strengthen visibly during 2H2021 in
tandem with the advancement of the Covid vaccination program and
renewed fiscal stimulus which is expected to be only partially
offset by rising rates and lingering political noise and policy
    Latam stocks were flat in early trade, but
lagged the record highs seen in their global peers. 
    Key Latin American stock indexes and currencies:
                              Latest     Daily % change
 MSCI Emerging Markets         1349.42               0.05
 MSCI LatAm                    2403.23              -0.08
 Brazil Bovespa              121074.91              -0.03
 Mexico IPC                   48581.38               -0.3
 Chile IPSA                    4992.74               0.09
 Argentina MerVal                 0.00                  0
 Colombia COLCAP               1314.47               -0.2 Currencies             Latest     Daily % change
 Brazil real                    5.6046              -0.36
 Mexico peso                   19.8528               0.31
 Chile peso                      700.7               0.46
 Colombia peso                  3596.6               0.15
 Peru sol                        3.633              -0.01
 Argentina peso                92.9200              -0.12

 (Reporting by Ambar Warrick in Bengaluru; editing by Jonathan