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EMERGING MARKETS-Mexico's peso gains, but set for worst year since 2016

 (There will be no Latin America-focused emerging market report
on Jan. 1 owing to the New Year's Day holiday)
    By Shashank Nayar
    Dec 31 (Reuters) - Mexico's peso gained on Thursday in its
last trading day of the year after authorities were close to
authorizing a COVID-19 vaccine, though the currency was set to
close 2020 lower in its worst performance in four years due to
weak oil prices.  
    The peso gained 0.3% after Foreign Minister Marcelo
Ebrard said on Twitter that Mexican authorization of AstraZeneca
and Oxford University's vaccine was "imminent." Mexico is
helping to produce the vaccine and has agreements to receive
doses from March.
    Latin American stocks and currencies marked their worst year
in five years as mounting fiscal concerns fueled by the
coronavirus crisis kept sentiment subdued toward risky regional
assets.
    MSCI's index of LatAm currencies and stocks
 dropped between 13% and 15% this year, the most
since 2015. In comparison, broader emerging market stocks and
currencies logged annual gains.
    Despite edging higher on Thursday, the Mexican peso
was on track to lose 5% for the year as crude oil markets lost
about a fifth of their value in 2020, which has weighed on the
oil exporting nation's currency.
    Columbia's peso, which lost nearly 4% during the
year, also tracked losses in oil markets, while lower inflation
rates due to the COVID-19 crisis continued to weigh on the
currency.
    A Reuters poll predicted Colombia's 2020 inflation will hit
its lowest level since records began as price increases of 1.45%
this year were far below the central bank's targeted 3%.

    Brazil's real was the worst performing Latin American
currency, falling nearly 30% this year as serious concerns over
the country's fiscal health kept investor interest subdued,
while Chile's peso was the best-performing currency in
the region.
    The peso was the sole annual gainer in the region, thanks to
a resurgence in the price of copper - the country's largest
export. 
    Recovering industrial demand in China was one of the biggest
contributors to the spike in copper prices.
    Analysts at ING believe that looser U.S. monetary policies
would lead investors to begin to look for higher-yielding
emerging markets and take more risk next year.
    The rapid spread of the virus in the region led most Latin
American stocks and currencies to severely lag their emerging
market peers for the year, and investors sought better prospects
in Europe and Asia.
    MSCI's index of emerging-market currencies
was at its highest since April 2018, on course to end 2020 with
gains of over 3%. Stocks were at a 13-year peak,
heading for a 16% rise this year.
    Key Latin American stock indexes and currencies:
    
                              Latest    Daily %
                                         change
 MSCI Emerging Markets         1292.54      0.27
                                        
 MSCI LatAm                    2458.13     -0.33
                                        
 Mexico IPC                   44547.63     -0.33
                                        
                                                
       Currencies             Latest    Daily %
                                         change
 Mexico peso                   19.8569      0.17
                                        
 

 (Reporting by Shashank Nayar in Bengaluru; Editing by Dan
Grebler)
  
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