EMERGING MARKETS-Colombian peso surges in catch-up trade, Latam FX muted

    * Colombian peso nears 1-mth high
    * Chile's peso recovers from constitution vote shock

    By Ambar Warrick
    May 18 (Reuters) - Colombia's peso rose in catch-up trade on
Tuesday as dovish signals from the U.S. Federal Reserve buoyed
risk assets, while Chile's peso recovered from its worst day in
more than four months. 
    Colombia's peso rose 0.8% to a near one-month high
after a long weekend, supported by data last week that showed
the Colombian economy grew by more than expected in the first
    But anti-government protests, which began in late-April
against a now withdrawn tax reform, have dampened the country's
economic outlook and had sent the peso to a six-month low
    Gains in oil prices also supported the peso, as investors
bet on a boost to crude demand from Europe and the United States
reopening their economies.
    "The energy complex is shrugging off angst surrounding
COVID-19 flare-ups in Asia, as the global reopening is set to
translate into an incredible demand story this summer," analysts
at TD Securities wrote in a note.
    Broader sentiment was widely risk-on, as comments from the
Fed on Monday suggested that U.S. interest rates would be static
until at least next year. This weighed on the dollar and
Treasury yields, helping riskier assets.
    Positive economic growth data also helped sentiment, while
rising inflation expectations this year saw many emerging market
central banks either beginning to tighten policy, or signaling
that they will. 
    Brazil's real, which has benefited from a recent
tightening spree by the country's central bank, was muted on
Tuesday, after the government raised its inflation and economic
growth outlook for 2021. 
    Chile's peso rose slightly after marking its worst
day in more than four months on Monday. 
    Chilean stocks also recovered from their worst day
in more than a year, after the country's ruling center-right
coalition failed to secure a critical one-third of seats in the
body that will draft a new constitution, increasing the chances
of more radical, investment-unfriendly proposals.
    Data showed the Chilean economy grew lesser-than-expected in
the first quarter. 
    Mexico's peso dropped 0.3% as talks began on Monday
over the United States-Mexico-Canada Agreement (USMCA) Free
Trade Commission, which centers on the trade accord that last
year replaced the North American Free Trade Agreement.

    Key Latin American stock indexes and currencies:
                              Latest     Daily % change
 MSCI Emerging Markets         1332.69              1.62
 MSCI LatAm                    2506.52              0.07
 Brazil Bovespa              122688.99              -0.2
 Mexico IPC                   49743.60              0.75
 Chile IPSA                    4242.20              2.27
 Argentina MerVal                 0.00                 0
 Colombia COLCAP               1282.84             -0.54 Currencies             Latest     Daily % change
 Brazil real                    5.2731             -0.14
 Mexico peso                   19.8316             -0.32
 Chile peso                      713.8              0.20
 Colombia peso                 3654.33              0.78
 Peru sol                         3.71              0.08
 Argentina peso                94.1600             -0.02
 (Reporting by Ambar Warrick in Bengaluru
Editing by Alistair Bell)