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EMERGING MARKETS-Brazil's real slumps to record low; other Latam assets muted

By Shreyashi Sanyal

* Brazil Economy Minister relaxed about real's fall * Latin American currencies ease against a firmer dollar * U.S.-China officials hold phone call, discuss core issues * Argentina September GDP proxy figures eyed By Shreyashi Sanyal Nov 26 (Reuters) - The Brazilian real fell to a record low on Tuesday, a day after figures showed a widening current account deficit in Latin America's biggest economy, while other assets in the region were subdued as investors looked for fresh signs of progress in U.S.-China trade talks. The real slid lower than the level hit in 2015, when Brazil was mired in one of the deepest recessions in its history. The currency has also been battered this month after a failed oil auction. Speaking to reporters in the United States, Economy Minister Paulo Guedes said he wasn't concerned about the exchange rate and that a weakening exchange rate was a natural consequence of falling interest rates. "The real will probably continue to lose its yield support, which puts it at a disadvantage in strong-dollar environments," said Sacha Tihanyi, deputy head of emerging markets strategy at TD Securities. In an effort to limit losses for the currency, the Brazilian central bank said on Tuesday it would sell dollars in the spot currency market. The wider MSCI index of Latin American FX eased 0.5% as the dollar gained slightly on lingering optimism about a Sino-U.S. trade truce. It had earlier jumped to a two-week high against the safe-haven Japanese yen. China said on Tuesday top trade negotiators from both countries had reached a consensus on "resolving relevant problems," but indicated no timeline for signing a deal. Major central banks in Latin America have steadily lowered borrowing costs to help economies in the region combat sluggish growth as the trade pact between the world's two biggest economies remains elusive. The Mexican peso edged 0.1% lower on Tuesday, a day after revised data from the national statistics agency showed the economy entered a slight recession in the first two quarters of this year. Colombia's peso eased 0.9%, as largely peaceful anti-government protests were expected to continue into Tuesday. Investors are now awaiting GDP proxy figures for September in Argentina, after its hard-hit economy managed to edge out of a recession in the second quarter. Key Latin American stock indexes and currencies at 1500 GMT: Stock indexes Latest Daily % change MSCI Emerging Markets 1047.16 -0.6 MSCI LatAm 2639.73 -1.78 Brazil Bovespa 106990.03 -1.32 Mexico IPC 43271.14 -0.61 Chile SPIPSA 4607.53 -0.95 Argentina MerVal 33069.41 -1.27 Colombia Colcap 1593.24 -0.47 Currencies Latest Daily % change Brazil real 4.2536 -0.93 Mexico peso 19.4690 -0.16 Chile peso 792.82 -0.19 Colombia peso 3462.64 -0.88 Peru sol 3.3788 0.21 Argentina peso (interbank) 59.7000 0.03 (Reporting by Shreyashi Sanyal in Bengaluru; editing by Jonathan Oatis)