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EMERGING MARKETS-Latam FX mixed: Brazil's real up, Colombian peso awaits cenbank decision

By Susan Mathew

By Susan Mathew June 21 (Reuters) - Mexico's peso slipped in subdued volume on Friday and Colombia's currency treaded water ahead of a decision by its central bank on interest rates amid concerns over U.S.-Iran tensions. The geopolitical worries cut short a strong rally spurred by some major central banks striking a dovish tone this week, putting most regional and broader emerging market assets on course for weekly gains. Returning from a holiday, Brazil's real firmed 0.4% and was on track for a weekly increase of about 1.7%. Late Wednesday, Brazil's central bank kept its key rate unchanged as expected and held back from signaling looser policy due to doubts about economic reforms. "We remain of the view that the BCB sits on hold for 2019, at least until pension reform is closer to completion," Sacha Tihanyi, deputy head of emerging markets strategy at TD Securities, said after the central bank decision. "But we push out our call for future tightening by 6 months to third-quarter of 2020. The bias of near-term risk to our view remains for additional easing in 2019." Mexico's peso slipped 0.2%, on course for a 0.6% weekly advance, while Colombia's currency was flat. Colombia's central bank is expected to hold the benchmark rate steady at its meeting later in the day in a bid to jumpstart the economy even as inflation expectations rise, a Reuters poll of 18 analysts showed. The bank may have to see stronger growth data materialize before acting and only happen toward the end of the year, Credit Suisse analyst Juan Lorenzo Maldonado wrote in a note on Thursday. Among stocks, those in Sao Paulo jumped more than 1%, with gains being broad-based. Equities in Chile, Mexico and Colombia were quiet. World stocks fell as investors worried about possible U.S. military strikes on Iran in retaliation for the downing of an unmanned U.S. surveillance drone. Key Latin American stock indexes and currencies at 1403 GMT: Stock indexes Latest Daily % change MSCI Emerging Markets 1054.02 0.02 MSCI LatAm 2874.18 1.23 Brazil Bovespa 101782.35 1.47 Mexico IPC 43688.39 0.1 Chile IPSA 5049.73 -0.22 Argentina MerVal - - Colombia IGBC 12615.98 -0.09 Currencies Latest Daily % change Brazil real 3.8213 0.74 Mexico peso 19.0438 -0.26 Chile peso 683.1 0.04 Colombia peso 3188.15 0.00 Peru sol 3.31 0.00 Argentina peso - - (interbank) (Reporting by Susan Mathew in Bengaluru; Editing by Jeffrey Benkoe)