EMERGING MARKETS-Brazil's real leads gains as Latam FX tracks commodities higher

* EMFX sentiment seen improving * Copper, iron ore prices surge on Chinese demand hopes * Mexican peso muted on oil supply hit By Ambar Warrick Aug 24 (Reuters) - A rally in commodity prices boosted Latin American currencies in early trade on Tuesday, although uncertainty over U.S. monetary policy and the spread of the coronavirus capped any large gains. Brazil's real led the charge, rising 1.1% after sinking to a more than three-month low last week. Gains in the prices of iron ore and sugar, which are major exports of the country, supported the currency. Iron ore prices in particular surged on Tuesday as easing worries over the COVID-19 outbreak in China helped calm nerves over a potential hit to demand. Shares of Brazilian iron ore miner Vale jumped 3.5% and were among the biggest boosts to the Bovespa stock index, which rose more than 1%. Broader emerging market currencies also extended gains, with MSCI's index of currencies rising 0.3% after its biggest weekly drop in two months last week. The U.S. dollar was steady after surging to a more than nine-month high last week as investors fretted over rising COVID-19 cases and when the Federal Reserve could start tapering stimulus measures and reduce liquidity in the market. The Fed's annual economic symposium in Jackson Hole, Wyoming, is a point of focus for markets this week. Trading volumes are expected to be largely muted in anticipation of the event, which is expected to provide more clues to the Fed's plans. In Latin America, Colombia's peso rose 0.4% as oil prices extended a rally on expectations of a recovery in demand. "With the impact on demand fueling chatter that OPEC+'s next monthly output hike could be delayed, and China's 'Zero-Covid' strategy appearing to have quickly contained the outbreak, crude oil could once again have a solid footing to challenge the $70s again," analysts at TD Securities wrote in a note. But crude exporter Mexico's peso was little changed as a fire on a Pemex oil platform wiped out about a quarter of the country's overall crude output. Chile's peso rose 0.3%, tracking gains in copper prices as investors bet on improving demand for the red metal this year, particularly in major importer China. Most Latin American stocks rose in early trade, with MSCI's index of regional stocks adding more than 2%. Key Latin American stock indexes and currencies: Latest Daily % change MSCI Emerging Markets 1267.36 2.41 MSCI LatAm 2432.28 2.06 Brazil Bovespa 119485.59 1.71 Mexico IPC 52200.18 0.28 Chile IPSA 4376.13 -0.38 Argentina MerVal - - Colombia COLCAP 1341.12 0.5 Currencies Latest Daily % change Brazil real 5.3209 1.12 Mexico peso 20.2808 0.10 Chile peso 781.3 0.30 Colombia peso 3865.3 0.38 Peru sol 4.0908 -0.02 Argentina peso 97.4300 -0.02 (interbank) (Reporting by Ambar Warrick; Editing by Steve Orlofsky)