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EMERGING MARKETS-Latam currencies hurt by strong dollar, stocks weaken

By Aaron Saldanha March 7 (Reuters) - Latin American currencies fell on Thursday as the dollar rose while Latin American stocks dropped, following weakness on Wall Street.

The dollar hit a near three-week peak against a basket of currencies after the European Central Bank postponed the timing of its first post-crisis rate hike to 2020 at the earliest and offered banks a new round of cheap loans to revive the euro zone economy.

MSCI's index of Latin American currencies was 1.5 percent lower, on track for its worst day in nearly three months.

Brazil's real dropped 0.9 percent to levels last seen in early 2019. The currency had been heavily bought since then on optimism about reform to the country's pension system.

Many investors believe revising the pension system of Latin America's largest economy is crucial, with UBS predicting the current system would represent 79 percent of the budget by 2026 if it is left unchanged.

Sao Paulo-traded stocks fell 0.4 percent, weighed by losses among industrials and energy stocks.

Brazilian state-run oil firm Petroleo Brasileiro SA's common shares and preferred shares fell 0.8 percent and 0.5 percent, respectively, as oil prices gave up earlier gains.

Highway operator CCR SA tumbled 5.9 percent to lead the index's losers, after its concessionaire agreed to a 750 million reais ($194.9 million) leniency deal related to alleged bribes.

Mexico's peso slid 0.4 percent after data showed consumer price inflation in February slowed from January. The data could partially dilute the justification for any hawkishness by the central bank at a policy meeting later this month.

Mexican stocks fell 0.9 percent on losses among financials and industrials.

Chile's peso slipped 0.3 percent as the price of copper, a key Chile export, slipped. Local stocks fell 0.2 percent due to losses among industrials.

Colombia's peso softened 0.2 percent, while Argentina's peso slid 1.5 percent as private investors bought dollars.

Key Latin American stock indexes and currencies at 1506 GMT Stock indexes daily % Latest change MSCI Emerging Markets 1044.62 -1.05 MSCI LatAm 2711.63 -1.6 Brazil Bovespa 93829.19 -0.41 Mexico IPC 41543.72 -0.87 Chile IPSA 5245.49 -0.2 Argentina MerVal 32319.80 -0.06 Colombia IGBC 12433.43 -0.27 Currencies daily % change Latest Brazil real 3.8652 -0.78 Mexico peso 19.4430 -0.43 Chile peso 663.5 -0.60 Colombia peso 3112.01 -0.24 Peru sol 3.309 -0.06 Argentina peso (interbank) 41.3000 -1.33 ($1 = 3.8487 reais) (Reporting by Aaron Saldanha in Bengaluru Editing by Susan Thomas)