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EMERGING MARKETS-Mexican peso up off biggest daily decline in nearly a month

    * Brazil holiday expected to keep volumes low
    * Mexican peso up 04.%, carry trade potential eyed

 (New throughout, updates prices, market activity and comments)
    By Ambar Warrick and Susan Mathew
    April 21 (Reuters) - Mexico's peso rose on Wednesday,
recovering from the previous day's slide, and stocks hit 2-1/2
year highs, while most other Latin American currencies traded
sideways against a steady dollar. 
    Trading in the region was slow due to a holiday in Brazil,
Latam's largest economy.
    The peso rose 0.4%, recovering from its biggest daily
decline in nearly a month, while the IPC stocks index
rose 0.8%, marking its sixth session of gains in seven. 
    Gains were led by a 5.5% jump in conglomerate Alfa
 after it reported results.
    Mexico's peso has benefited also from increased interest in
carry trade, owing to its relatively higher yield, as well as
reduced volatility in currency markets. The currency has nearly
recouped all of its losses this year.
    Capital Economics' senior market economist Oliver Jones said
he expects the focus in currency markets to increasingly turn to
whether individual countries lead or lag in a global economic
recovery from a COVID-19 pandemic induced slump, and the
corresponding changes in their "risk-free" rates.
    Crude exporter Colombia's peso firmed 0.8%. The
government on Wednesday said Colombia would restart some
domestic flight next month.
    Focus in the Andean country turned to proposed tax reforms,
which could spur spending cuts by the government if rejected.
Ratings agency Fitch on Wednesday rated a Colombia's longer
dated bonds in the last rung of investment grade.

    Chile's peso hovered around the highest level in more
than three months, on strong prices for top export copper.

    Improving sentiment over copper demand has pushed prices of
the red metal close to 10-year highs, helping the peso outpace
its Latam peers this year.
    Latam stocks fell 0.6%, tracking steep
losses across the emerging market space as risk-driven assets
retreated.
    Argentina's peso retreated slightly amid uproar
over movement curbs there to contain the pandemic. Central bank
support helped contain losses in the currency.

    
    Key Latin American stock indexes and currencies:
  Stock indexes           Latest   Daily %
                                   change
 MSCI Emerging Markets    1335.57    -0.89
                                   
 MSCI LatAm               2396.37     -0.6
                                   
 Mexico IPC              48932.17     0.83
                                   
 Chile IPSA               4946.58    -0.59
                                   
 Argentina MerVal        47029.94    0.289
                                   
 Colombia COLCAP          1307.93    -0.26
                                   
                                          
      Currencies          Latest   Daily %
                                   change
 Mexico peso              19.8940     0.33
                                   
 Chile peso                 698.4    -0.29
                                   
 Colombia peso             3612.4     0.81
                                   
 Peru sol                  3.7087    -0.51
                                   
 Argentina peso           93.0300    -0.05
 (interbank)                       
                                   
 
 (Reporting by Ambar Warrick in Bengaluru; Editing by Kirsten
Donovan and David Gregorio)
  
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