By Agamoni Ghosh Feb 19 (Reuters) - Latin American currencies strengthened on Tuesday amid increased risk appetite for assets in the region as the dollar softened with investors tracking the next round of trade talks between the United States and China.
A new round of talks between the United States and China to resolve their trade war will take place in Washington on Tuesday, with follow-up sessions at a higher level later in the week, the White House said.
Although very little is known about details of the talks, news of progress between the world's largest economies have kindled hopes among investors that the two countries can reach a compromise by a March 1 deadline for resuming tariffs.
Global equities showed a subdued trend on the day with Asian indices barely holding ahead of the fresh Sino-U.S.trade talks and European stocks slumping on news of possible U.S. tariffs for the auto sector coming to Europe.
MSCI's index for Latin American currencies rose 0.3 percent matching the moves of Brazil's real and Mexico's peso as oil prices hovered around 2019 highs supported by OPEC-led supply cuts.
"It seems to be just general risk appetite improving in the region with higher oil prices helping," said Edward Glossop, emerging markets economist at Capital Economics.
Stocks in Brazil managed to buck the global trend and shed losses from the previous session when the main index slipped over 1 percent as investment sentiment soured on uncertainty fed by a brewing political scandal.
Brazilian President Jair Bolsonaro fired Secretary General Gustavo Bebianno due to accusations of misusing campaign funds for congressional candidates in last year's election.
Bebianno's departure cast doubt over the young government's ability to pass crucial pension reforms on time. The draft of the proposed reform is expected to be tabled in the Congress this week.
The Chilean peso was marginally lower, dragged down by a decline in the price of copper, the country's main export, while stocks on the IPSA index shed 0.1 percent.
Key Latin American stock indexes and currencies at 1420 GMT Stock indexes daily % Latest change MSCI Emerging Markets 1034.22 -0.24 MSCI LatAm 2877.06 0.83 Brazil Bovespa 97296.48 0.82 Mexico IPC - - Chile IPSA 5366.75 -0.07 Argentina MerVal - - Colombia IGBC - - Currencies daily % change Latest Brazil real 3.7226 0.30 Mexico peso 19.2093 0.25 Chile peso 659.9 -0.08 Colombia peso - - Peru sol - - Argentina peso (interbank) - - (Reporting by Agamoni Ghosh in Bengaluru; Editing by Andrea Ricci)