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EMERGING MARKETS-Latam assets rise, lifted by China stimulus, U.S. rate cut bets

By Sruthi Shankar

(Updates prices, changes analyst's quote) By Sruthi Shankar Sept 6 (Reuters) - An index of Latin American currencies rose on Friday, on track to record its first weekly gain in seven weeks, as China's move to boost lending boosted their appeal to investors, as did slower U.S. job growth. Signs of resumption in U.S.-China trade talks and easing political tensions in Asia and Europe this week prompted investors to buy back into battered developing world stocks and currencies. With the dollar on the backfoot, the Mexican peso jumped 1% to touch a three-week high on Friday, while currencies of Brazil, Colombia, Chile and Argentina rose between 0.43% and 0.86%. U.S. jobs numbers painted a mixed picture of the world's largest economy, as hiring slowed more than expected and wage gains picked up. This fueled expectations of further rate cuts from the Federal Reserve this year. Meanwhile, China's central bank said it was cutting the amount of cash that banks must hold, releasing 900 billion yuan ($126.35 billion) in liquidity to shore up the flagging economy. MSCI's index of Latin American currencies, which edged higher for a third session, was set to finish the week with a 1.8% gain, its biggest such since early February. "Various events have improved the risk backdrop this week for EM. Yet the case for a sustained rebound is challenging," Morgan Stanley analysts wrote in a note. "Nonetheless, we see a tactical opportunity to add some risk." Brazil's real rose 0.8% on Friday after data showed consumer price inflation was well contained in August, reinforcing expectations of deeper rate cuts by the central bank as it tries to fire up economic growth. After falling for seven weeks in a row - its longest losing streak this year - the real rose around 1.8% on the week, hitting a two-week high of 4.05 per dollar. The Argentine peso recorded its biggest weekly gain since October 2018 after the country imposed capital controls. The currency has been battered since President Mauricio Macri suffered a thumping defeat in primaries at the hands of Alberto Fernandez. Equities in the region moved mostly higher, with Sao Paulo's Bovespa index up 0.7% on the day, helped by strong gains in banking shares. In some relief for battered emerging markets, specialist emerging market investor Ashmore said on Friday it saw its assets under management grow by 24% for the year ending June 30, helped by both inflows and positive market performance. Latin American stock indexes and currencies at 1930 GMT: MSCI Emerging Markets 1008.57 0.55 MSCI LatAm 2679.69 1.02 Brazil Bovespa 102993.86 0.73 Mexico IPC 42820.46 0.21 Chile IPSA 4830.69 0.27 Argentina MerVal 27141.42 0.777 Colombia IGBC 12700.12 -0.01 Currencies Latest Daily % change Brazil real 4.0735 0.86 Mexico peso 19.5536 1.01 Chile peso 711.05 0.62 Colombia peso 3351.25 0.69 Peru sol 3.342 0.66 Argentina peso (interbank) 55.8000 0.43 (Reporting by Sruthi Shankar and Agamoni Ghosh in Bengaluru; ; Editing by Sandra Maler)