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EMERGING MARKETS-Mexican peso leads Latam FX lower as oil slides

 (Updates prices)
    By Medha Singh and Susan Mathew
    Sept 21 (Reuters) - Latin American stocks and currencies
took a beating on Monday as investors worried that rising
COVID-19 cases could deal another blow to the global economy,
while sliding oil and copper prices added pressure to the
region's exporters.
    The safe haven U.S. dollar caught a bid and Wall
Street stocks sold off on concerns that a resurgence of COVID-19
infections this autumn could trigger another round of business
shutdowns and threaten a fragile economic rebound.

    The Mexican peso fell 1% and the Colombian peso
 shed 1.7%, leading losses among Latin American currencies
as crude prices weakened on the prospects of that Libyan
production would rise even as global demand stays weak.

    Colombia's capital, Bogota, lifted most coronavirus-induced
restrictions, but the mayor's office warned that a new outbreak
in the city of 8 million is inevitable.
    The Chilean peso fell to its lowest in nearly two
weeks as prices of copper, the biggest source of Chile's export
revenue, retreated from a two-year high.
    Attention also turned to central bank meetings in Mexico on
Thursday and Colombia on Friday. 
    After delivering five consecutive 50-basis-point reductions
in interest rates to support an economy struggling with the
impact of coronavirus pandemic, Bank of Mexico is expected to
trim rates by only 25 basis points to 4.25% this week amid
rising inflation.
    "We see relative hawkishness, within an environment of
easing, underpinning the carry support for MXN," said Sacha
Tihanyi, deputy head of emerging markets strategy at TD
Securities.
    "The market positioning implied by rates, as well as FX,
suggests a muted reaction to a rate cut, though a greater than
25bp cut may drive knee-jerk, but short-lived, weakness."
    S&P on Monday said it does not necessarily see another
ratings downgrade to Mexico's sovereign credit rating, after a
cut last March.
    In Argentina, the peso hit another all-time low,
over-the-counter bonds fell an average 2.2% and a J.P. Morgan
risk index rose as investors priced in rising risks over
the country's economic recovery following tightened capital
controls last week.
    Buenos Aires listed shares shaved off about 2%,
while other Latam equities were also trading lower.
    Petrobras was among the biggest
weights on Brazil's Bovespa index after a second justice
in Brazil's Supreme Court voted against allowing the state-owned
oil company's planned sale of eight refineries.
        
    Key Latin American stock indexes and currencies at 1923 GMT:
  Stock indexes           Latest   Daily %
                                   change
 MSCI Emerging Markets    1089.61    -1.71
                                   
 MSCI LatAm               1906.61    -3.21
                                   
 Brazil Bovespa          96859.06    -1.46
                                   
 Mexico IPC              35594.53    -1.17
                                   
 Chile IPSA               3644.10    -2.29
                                   
 Argentina MerVal        40685.82   -1.924
                                   
 Colombia COLCAP          1194.87    -0.97
                                   
                                          
      Currencies          Latest   Daily %
                                   change
 Brazil real               5.3996    -0.43
                                   
 Mexico peso              21.3640    -1.11
                                   
 Chile peso                 773.4    -1.32
                                   
 Colombia peso            3780.23    -1.36
                                   
 Peru sol                   3.549    -0.74
                                   
 Argentina peso           75.5800    -0.26
 (interbank)                       
                                   
 
 (Reporting by Medha Singh in Bengaluru; Editing by David
Gregorio and Marguerita Choy)
  
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