EMERGING MARKETS-Colombian peso falls on protests, Brazil real leads Latam FX declines

    * U.S. consumer prices post biggest gain in nearly 12 years
    * Brazil services activity falls in March, first in 10
    * Dollar gains after four sessions of decline

 (Adds details, updates prices throughout)
    By Shreyashi Sanyal and Shashank Nayar
    May 12 (Reuters) - Colombia's peso fell on Wednesday as
anti-government protests entered their third week, while the
Brazilian real led declines among Latin currencies as a
larger-than-expected jump in U.S. inflation lifted the dollar. 
    The peso fell 1.1% after union members, students,
pensioners and workers took to the streets of Colombia to march
in anti-government protests, amid so-far fruitless talks.

    The oil-exporters currency weakened despite a sharp rise in
crude prices, which were on track for eight-week highs on demand
    Brazil's real fell 1.5% after gaining for five
consecutive sessions. Services activity fell in March for the
first time in 10 months, meaning the sector shrank in the first
quarter of the year back to below pre-pandemic
    Treasury yields rose 3 basis points to 1.65% and the dollar
strengthened after U.S. consumer prices increased more than
expected in April, leading many to believe inflationary
pressures could spur the Federal Reserve into tightening policy
earlier than signaled.
    A weak U.S. labor market has kept the Fed's stance largely
    "We think that most EM currencies will fall a bit further
over the rest of this year, in part because we forecast the
10-year U.S. Treasury yield to rise above 2%," said Jonas
Goltermann, senior markets economist at Capital Economics. 
    "As a result, we expect yield differentials to generally
shift in favor of the dollar, and pressure on the currencies of
economies with weaker fiscal and external balance sheets to
increase," Goltermann added. 
    The yield-sensitive Mexican peso fell 0.9% even as
Mexico's industrial output rose 0.7% in March from February, the
10th consecutive monthly increase, official data
    Copper producer Chile's peso eased 0.7% despite a
jump in oil and copper prices.
    The Peruvian sol rose 0.3% and was the only gainer
among its Latin American peers. Opinion polls showed the gap
closing between socialist front-runner Pedro Castillo and the
right-wing Keiko Fujimori ahead of June 6 presidential
    Key Latin American stock indexes and currencies at 1927: 
         Stock indexes                  Latest    Daily %
 MSCI Emerging Markets                   1311.55    -1.32
 MSCI LatAm                              2444.53     -3.4
 Brazil Bovespa                        119755.18    -2.61
 Mexico IPC                             48874.92    -1.57
 Chile IPSA                              4502.30    -0.85
 Argentina MerVal                       51218.29    0.243
 Colombia COLCAP                         1286.92     -0.4
             Currencies                 Latest    Daily %
 Brazil real                              5.3027    -1.50
 Mexico peso                             20.1628    -1.06
 Chile peso                                707.2    -0.72
 Colombia peso                           3747.88    -1.03
 Peru sol                                 3.7158    -0.32
 Argentina peso (interbank)              93.9800    -0.02
 Argentina peso (parallel)                   149     1.34

 (Reporting by Shreyashi Sanyal and Shashank Nayar in Bengaluru;
Editing by Nick Macfie and Will Dunham)