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EMERGING MARKETS-Latam FX firms as US data suggests steady stimulus

MEXICO CITY, Oct 22 (Reuters) - Latin American currencies

gained on Tuesday after slower-than-expected jobs creation in

the United States supported the view that the U.S. Fed may

maintain its accommodative monetary policy into next year.

The Mexican peso led gains in the region, rallying

more than 1 percent, after the U.S. Labor Department said

employers added 148,000 jobs last month, fewer than the 180,000

posts expected by economists.

The U.S. non-farm payrolls data for September was delayed by

a 16-day partial shutdown of the U.S. government this month.

Latin American currencies had already rallied earlier this month

as investors bet the Fed would keep the stimulus in place for

longer to offset the negative economic impact of the shutdown.

The Fed's stimulus has held down yields on US Treasuries,

pushing investors to seek out higher returns in riskier assets,

such as emerging market currencies.

* The Mexican peso climbed 1.13 percent to 12.8450

per dollar, recovering almost all of the losses incurred on

Monday when weak local retail sales data supported bets that the

central bank will lower interest rates later this week.

* Most analysts expect the Mexican central bank to cut its

benchmark interest rate for the second month in a row on Friday,

by 25 basis points to 3.5 percent.

* A poll on Tuesday from Citigroup-unit Banamex showed an

increasing minority of analysts expect Mexico's central bank to

opt for a more aggressive 50-basis-point interest rate cut.

* Traders said a 25-basis-point cut would not likely hurt

the appeal of the peso, but a more aggressive 50-basis-point cut

could drive the Mexican currency back toward 13 per dollar.

* The Brazilian real firmed 0.51 percent amid

speculation the central bank could shift its intervention

program if the currency keeps gaining ground.

* Some analysts think Brazil's central bank will not roll

over all of the $8.9 billion worth of currency swaps that expire

early next month. The swaps are a hedge against a possible

depreciation of the real.

Latin America FX prices at 2300 GMT:

Currencies daily % YTD %

change change


Brazil real 2.1720 0.51 -5.99

Mexico peso 12.8450 1.13 0.15

Chile peso 499.5000 0.46 -4.16

Colombia peso 1879.9000 0.24 -6.06

Peru sol 2.7540 0.73 -7.37

Argentina peso 5.8600 0.04 -16.17

Argentina peso 10.0300 -1.40 -32.40