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EMERGING MARKETS-Latam FX slip; Brazilian real dips on political woes

    * Latam FX fall, lag EMFX 
    * Brazil's Bolsonaro implicated in alleged graft scheme 
    * Colombian markets were also closed for a holiday
    * Petrobras hikes fuel prices; shares fall 

 (Updates prices)
    By Ambar Warrick and Susan Mathew
    July 5 (Reuters) - Latin American currencies fell on Monday,
lagging broader emerging market peers, with Brazil's real
extending losses to a fifth straight session on growing concerns
over corruption in the country.
    The real hit a two-week low and was last trading down
0.7%, despite data that showed private sector business activity
in Brazil roared back to life in June, benefiting from the
easing of some COVID-19 restrictions.
    Website UOL reported on Monday that Brazilian President Jair
Bolsonaro was involved in a scheme to skim salaries of his aides
while a federal deputy. This comes after the Supreme Court
authorized an investigation of Bolsonaro over the procurement
process for an Indian COVID-19 vaccine.

    Recent political developments, particularly Bolsonaro's
declining popularity, have removed the sheen from the real,
which lost about 4% over the last six days.
     Still, the currency is up 2% this year, and is the best
performer in Latin America, propped up by positive data and a
hawkish central bank.        
    Broader emerging market currencies rose as
last week's high U.S. unemployment data continued to weigh on
the dollar. But trading was light because of a public holiday in
the United States.
    The prospect of a weak U.S. jobs market is expected to keep
the Federal Reserve from tightening monetary policy in the near
term and benefit emerging markets. Minutes of the Federal
Reserve's previous meeting on Wednesday will be eyed for more
clues. 
    Rabobank's Christian Lawrence does not see the currencies as
vulnerable as they were during the 2013 taper tantrum, adding
that a hawkish stance by many EM central banks to keep rate
differentials attractive creates less of a negative story for
EM.
    "I'm constructive of EM over the next couple of months," he
said. "I expect the dollar to be strong but more so against
developed markets rather than EMs."
     Chile's peso gave up 0.2%, but losses were capped on
Monday by a rise in the price of copper, the country's top
export. Peru's sol lost 0.7%, losing for the third
session running. 
    Mexico's currency fell 3%, though data showed
increasing Mexican consumer confidence in June.
    In Argentina, Buenos Aires province extended the deadline
for a $7 billion debt restructuring deal and agreed to renew a
"last round" of talks with creditors after more than a year of
fraught negotiations.
    Among stocks, oil major Petrobras was among the
biggest drags on Sao Paulo's Bovespa index. The company
announced price hikes for gasoline and diesel on Monday, the
under the new chief executive. Bolsonaro had ousted the previous
head for hiking diesel prices.  
       
    Key Latin American stock indexes and currencies at 1907 GMT:
 
   Stock indexes           Latest    Daily %
                                     change
 MSCI Emerging Markets      1354.66    -0.05
                                     
 MSCI LatAm                 2598.78    -0.72
                                     
 Brazil Bovespa           127160.39    -0.36
                                     
 Mexico IPC                50397.34     0.35
                                     
 Chile IPSA                 4276.41    -0.89
                                     
 Argentina MerVal          64831.62    2.371
                                     
 Colombia COLCAP            1289.38      2.3
                                     
                                            
      Currencies           Latest    Daily %
                                     change
 Brazil real                 5.0851    -0.67
                                     
 Mexico peso                19.8440    -0.43
                                     
 Chile peso                   735.9    -0.18
                                     
 Colombia peso                 3739     0.00
                                     
 Peru sol                    3.9215    -0.75
                                     
 Argentina peso             95.8800    -0.08
 (interbank)                         
                                     
 
    
 (Reporting by Ambar Warrick
Editing by David Goodman, William Maclean)
  
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