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EMERGING MARKETS-Colombian peso, Peruvian sol extend losses as strong dollar weighs

    * Brazil producer price inflation rises
    * Colombian peso leads losses for second straight day
    * Chile's peso the sole gainer

 (Adds details on stocks, updates prices and comment)
    By Ambar Warrick
    May 4 (Reuters) - Colombia's peso and Peru's sol extended
losses on Tuesday as most Latin American currencies dipped
against a stronger dollar, while Chile's peso was supported by
copper prices resuming their climb towards a decade high. 
    The dollar rose as investors awaited key U.S. readings this
week, which are likely to show an economic recovery gathering
steam. 
    A wave of COVID-19 infections in Latin America has also kept
appetite for local currencies subdued, while concerns over
political issues in Colombia and Peru weighed on sentiment.
    The Colombian peso, which fell 0.6%, led losses for a
second straight day after the government withdrew a proposed tax
reform, which was followed by the resignation of finance
minister Alberto Carrasquilla.
    Commerce minister Jose Manuel Restrepo, an economist, will
become finance minister.
    The government had insisted that the reform- which had
sparked violent protests across the country- was vital to
stabilizing Colombian finances as the country grapples with the
COVID-19 pandemic. 
    "The new finance minister is a well regarded figure… but now
has a huge challenge ahead: to explain to the population the
need of a reform, that if not passed would make Colombia lose
its investment grade rating," Mauricio Cardenas, former
Colombian finance minister, told the Reuters Global Markets
Forum.
     "With a reform that produces 1% of GDP in revenues,
Colombia will keep its investment grade rating."
    Peru's sol dropped 0.4% to 3.8328, trading close to a
record low of 3.8452 as concerns over a socialist presidency
weighed. The sol has lost heavily after left-leaning
presidential candidate Pedro Castillo was seen leading the polls
ahead of a run-off vote in June.  
    Chile's peso was the sole gainer for the day, rising
0.3% as copper prices resumed their climb towards 10-year highs
on hopes of recovering global demand.
    Losses in Brazil's real were somewhat
constrained as investors priced in a large interest hike by the
Brazilian central bank on Wednesday amid rising
inflation.
    Economy minister Paulo Guedes said the real was poised to
rise against the dollar, as the country emerges from a severely
damaging wave of COVID-19 infections.
    The MSCI's index of Latam stocks tumbled
1.2%, tracking a pullback in global equities on selling in major
technology stocks.
    Brazil's Bovespa dropped 1.3%, with Itau Unibanco
Holding SA the top drag on the index despite a
stronger-than-expected quarterly profit.
    Analysts were skeptical over the bank's ability to repeat a
strong performance in future quarters.
    
    Key Latin American stock indexes and currencies:
    
                              Latest      Daily % change
 MSCI Emerging Markets         1334.09                -0.36
                                        
 MSCI LatAm                    2365.23                -1.16
                                        
 Brazil Bovespa              117708.79                -1.26
                                        
 Mexico IPC                   48339.73                -0.33
                                        
 Chile IPSA                    4633.37                 0.96
                                        
 Argentina MerVal             48593.02               -0.572
                                        
 Colombia COLCAP               1215.25                -0.11 Currencies             Latest      Daily % change
 Brazil real                    5.4335                -0.30
                                        
 Mexico peso                   20.2307                -0.34
                                        
 Chile peso                      702.1                 0.28
                                        
 Colombia peso                 3825.75                -0.62
 Peru sol                       3.8328                -0.44
                                        
 Argentina peso                93.7100                -0.03
 (interbank)                            
                                        
 
    

 (Reporting by Ambar Warrick in Bengaluru; Additional reporting
by Lisa Pauline Mattackal; Editing by Angus MacSwan and Andrea
Ricci)
  
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