EMERGING MARKETS-Latin American currencies outpace EM peers

* Brazil puts off discussion of inflation targets * Colombia’s peso set to end third week lower * Mexico’s economy grew by 2.8% in Jan – preliminary estimate * Latam FX adds 0.4%, up 1.1% so far this week By Shubham Batra and Bansari Mayur Kamdar Feb 17 (Reuters) – Latin American currencies rose on Friday and were on track for their first weekly gain in February, while regional stocks also outpaced their emerging market peers this week supported by sharp gains in Mexican and Brazilian shares. The MSCI’s index for emerging market currencies lost 0.4% by 1455 GMT as the dollar index rose to a six-week high after strong U.S. data and comments from Fed officials led to traders betting more U.S. interest rate hikes. Latin American currencies, however, rose 0.4% and were on track to end the week more than 1% higher. “Over the coming next few months we’re going to see most of the central banks in Latam start to cut interest rates and that’s one of the factors that gives a boost to the equity market and some currencies,” said Andres Abadia, chief Latin America Economist at Pantheon Macroeconomics. “At the same time, with the reopening of the Chinese economy, we expect some commodity prices and some commodity markets to do better than we’ve seen in the last few months and that also gives some support to these countries.” The Brazilian real edged up 0.1% against the dollar after the country’s top economic policy body announced no new resolutions regarding its inflation targets at a monthly meeting on Thursday. Mexico’s peso added 0.1% but was still on course for a weekly decline pressured by weakening crude prices on concerns of more Fed hikes that could weigh on demand for oil. The Mexican economy was likely to have grown by 2.8% in January 2023, compared with the same month a year earlier, showed a preliminary estimate from its national statistics agency INEGI. Colombia’s peso inched 0.3% lower and was on track to post its third week of losses, with investors were wary about social and economic reforms put forward by President Gustavo Petro’s government. The Chilean peso slipped 0.1% against the greenback as copper prices eased. The Peruvian sol rose 0.4% against the dollar. Regional stocks fell 0.6%, but were still on track for weekly gains helped by Brazilian and Mexican stocks. The broader emerging markets index for stocks was on track for its third week of losses. Investment bank Morgan Stanley lifted the average “recovery value” for Ghana’s defaulted dollar-denominated government bonds to $46 from a previous forecast of $41 following the country’s deal to restructure its local currency debt. Key Latin American stock indexes and currencies at 1455 GMT: Stock indexes Latest Daily % change MSCI Emerging Markets 998.70 -1.23 MSCI LatAm 2245.33 -0.58 Brazil Bovespa 109332.38 -0.55 Mexico IPC 53758.07 -0.48 Chile IPSA 5368.47 -1.52 Argentina MerVal 255290.86 -0.76 Colombia COLCAP 1219.43 -0.56 Currencies Latest Daily % change Brazil real 5.2104 0.02 Mexico peso 18.5230 -0.06 Chile peso 791.6 -0.09 Colombia peso 4943.42 -0.35 Peru sol 3.8388 -0.09 Argentina peso (interbank) 193.1800 -0.18 Argentina peso (parallel) 373 1.07 (Reporting by Shubham Batra and Bansari Mayur Kamdar in Bengaluru, Editing by Angus MacSwan)