EMERGING MARKETS-Latam FX pare initial gains as investors assess Powell comments

* Chile copper exports total $2.98 bln in January * Brazil's c.bank sees risks from fiscal framework review * Latam FX rises 0.6%, stocks off 0.1% (Updates prices, adds details and comment) By Bansari Mayur Kamdar and Amruta Khandekar Feb 7 (Reuters) - Latin American currencies jumped sharply before paring some gains on Tuesday, with market relief at initially dovish comments by Federal Reserve Chair Jerome Powell short-lived as concerns about the U.S. rate hike trajectory lingered. During a question and answer session, Powell declined to equate the surprising strength in last Friday's U.S. jobs report with an expectation that interest rates would need to be higher than Fed officials estimated late last year. However, he later said if the central bank continues to get strong labor market or inflation reports, it may need to hike rates more than what is currently priced in. MSCI's index of Latin American currencies was last up 0.6%, outpacing broader emerging market currencies which fell 0.1%. The dollar fell after Powell's initial comments but clawed back some losses later. "Essentially what started as bit of a dovish rhetoric from Powell has certainly changed in the aftermath of that comment, because that really does open the door for more than two rate increases," said Christian Lawrence, senior market strategist at Rabobank. "In general, we are going to be seeing emerging market currencies still heavily rely on what happens in terms of U.S. interest rates." Top copper producer Chile's peso rose 1.1% against the U.S. dollar. The Andean country saw exports of the red metal reach $2.98 billion in January, down 21.6% from a year earlier, the central bank said, while trade surplus in January exceeded expectations. As crude prices jumped following Powell's comments, the currencies of oil exporters Mexico and Colombia rose 1.2% each. Mexico's peso is set to pare its advance of recent months but will keep trading at firm levels, helped by the central bank's aggressive policy tightening to combat elevated inflation, a Reuters poll showed. Elsewhere in emerging markets, trading on the Istanbul stock market was halted for a second time as a market-wide circuit breaker kicked in following heavy losses in the wake of Monday's devastating earthquake in Turkey and neighboring Syria. Overall, emerging market currencies are expected to drift higher in coming months thanks to improved global growth prospects, boosted in part by the reopening of China's economy, a Reuters poll of 40 foreign exchange strategists found. Limiting gains on the Latam FX index, Brazil's real slipped 0.4% against the dollar. Brazil's central bank expressed concern at increased inflation expectations, saying that a fiscal framework revision and government stimulus package may lead to upward pressure on consumer prices. This comes amid criticism from Brazilian President Luiz Inacio Lula da Silva that there was "no explanation" for the country's high interest rates. Stocks in Latin America edged 0.1% lower, with Brazil's Bovespa down 1%. Key Latin American stock indexes and currencies at 1911 GMT: Stock indexes Latest Daily % change MSCI Emerging Markets 1014.99 0.05 MSCI LatAm 2219.36 -0.08 Brazil Bovespa 107635.88 -1 Mexico IPC 53571.51 -0.88 Chile IPSA 5269.46 -0.31 Argentina MerVal 245910.00 0.945 Colombia COLCAP 1259.92 -0.68 Currencies Latest Daily % change Brazil real 5.1950 -0.41 Mexico peso 18.9391 1.17 Chile peso 793.1 1.12 Colombia peso 4726.06 1.21 Peru sol 3.8376 -0.06 Argentina peso 189.5100 -0.21 (interbank) Argentina peso 373 0.00 (parallel) (Reporting by Bansari Mayur Kamdar in Bengaluru; Editing by Arun Koyyur and Emelia Sithole-Matarise)