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EMERGING MARKETS-LatAm currencies up; rally undeterred by hawkish Fed

(Updates prices, adds pending pension reform in Brazil and Chile interest rate decision) By Bruno Federowski SAO PAULO, Feb 1 (Reuters) - Latin American currencies turned mostly higher on Thursday as hawkish remarks from the Federal Reserve failed to derail a month-long rally fueled by investors' appetite for risk.

In its policy statement on Wednesday, the Fed left U.S. interest rates unchanged but bolstered expectations that they would continue to rise by saying inflation was likely to accelerate this year.

Those comments initially led to losses in emerging market currencies, which offer higher yields, but the sell-off proved short-lived.

Instead, traders focused on Friday's key U.S. payrolls report, which is likely to offer additional hints on whether stubbornly slow inflation is accelerating toward the central bank's target.

Currencies from Brazil, Mexico and Colombia firmed between 0.05 percent and 1.35 percent, extending a rally underpinned by expectations of accelerating global growth.

Stock indices also rose throughout the region, except Argentina and Venezuela, although gains were somewhat muted.

Brazil's benchmark Bovespa stock index rose 0.69 percent as a decline in shares of lender Banco Bradesco SA kept a lid on gains.

Bradesco forecast fast loan book growth this year but more pressure on margins, disappointing investors. Goldman Sachs analysts called the company's predictions "conservative." Also in Brazil, the overhaul of the country's social security system to reduce its burden on the government's overdrawn accounts still does not have enough support in Congress, a senior official said on Thursday.

The pension reform bill is the cornerstone of President Michel Temer's efforts to reduce Brazil's budget deficit and is due to be put to a first vote in the lower house in the week of Feb. 19.

In Chile, the central bank voted unanimously on Thursday to keep its benchmark interest rate unchanged at 2.5 percent at its monthly policy meeting. The vote was in line with market expectations.

Key Latin American stock indexes and currencies at 2155 GMT: Stock indexes Latest Daily pct YTD pct change change MSCI Emerging Markets 1,248.65 -0.47 7.79 MSCI LatAm 3,227.04 0.91 14.1 Brazil Bovespa 85,495.24 0.69 11.90 Mexico IPC 50,591.15 0.27 2.51 Chile IPSA 5,862.57 0.12 5.35 Chile IGPA 29,465.12 0.15 5.30 Argentina MerVal 34,641.37 -0.85 15.22 Colombia IGBC 12,323.23 1.73 8.38 Venezuela IBC 3,187.34 -13.1 152.33 Currencies Latest Daily pct YTD pct change change Brazil real 3.1668 0.05 4.63 Mexico peso 18.3570 1.35 7.31 Chile peso 597.35 0.00 2.90 Colombia peso 2,793.05 1.30 6.77 Peru sol 3.211 0.00 0.81 Argentina peso (interbank) 19.3500 1.55 -3.88 Argentina peso (parallel) 19.88 0.35 -3.27 (Reporting by Bruno Federowski; editing by Diane Craft)