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EMERGING MARKETS-Colombian peso nears one month high in catch-up trade, Latam FX muted

    * Chile's peso recovers from constitution vote shock
    * Brazilian real trades in tight range

 (Adds comments, updates prices throughout)
    By Ambar Warrick and Shreyashi Sanyal
    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 the Chilean peso recovered from its worst day
in more than four months. 
    Colombia's peso rose 0.7% 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
quarter.
    But anti-government protests, which began in late-April
against a now withdrawn tax reform, have dampened Colombia's
economic outlook and had sent the peso to a six-month low
recently.
    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 tightening
spree by the central bank, was muted on Tuesday, after the
government raised its inflation and economic growth outlook for
2021. 
    Chile's peso rose 0.5% after marking its worst day in
more than four months on Monday. 
    "We think the peso might be due a pause while the market
digests the negative implications of the constitutional assembly
elections, particularly if copper prices stall," strategists at
Deutsche Bank wrote in a client note. 
    Chilean stocks 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.

    
    
    Latin American stock indexes and currencies at 1831 GMT: 
    
          Stock indexes                  Latest    Daily %
                                                   change
 MSCI Emerging Markets                    1334.80     1.78
 MSCI LatAm                               2512.76     0.32
 Brazil Bovespa                         123361.09     0.34
 Mexico IPC                              49882.99     1.04
 Chile IPSA                               4102.09     -1.1
 Argentina MerVal                        56030.37   -0.115
 Colombia COLCAP                          1270.94    -1.46
                                                          
             Currencies                  Latest    Daily %
                                                   change
 Brazil real                               5.2542     0.22
 Mexico peso                              19.8500    -0.41
 Chile peso                                 712.3     0.41
 Colombia peso                            3658.88     0.66
 Peru sol                                    3.74    -0.72
 Argentina peso (interbank)               94.1600    -0.02
                                                   
 Argentina peso (parallel)                    153     0.00
                                                   
 
    

 (Reporting by Ambar Warrick and Shreyashi Sanyal in Bengaluru
Editing by Alistair Bell and Grant McCool)
  
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