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EMERGING MARKETS-Latam FX, stocks rally strongly after U.S. jobless claims data

By Susan Mathew

By Susan Mathew March 26 (Reuters) - Latin American currencies erased early losses to trade 1% higher on Thursday after a record rise in U.S. jobless claims to 3.3 million saw the dollar deepen losses. Mexico's peso and Brazil's real both jumped 1%, looking to extend gains to a third straight session as the flood of monetary and fiscal stimulus from the United States eased some funding concerns, keeping the dollar pressured. On Thursday, the greenback deepened losses after data showed U.S. weekly jobless claims shot up from 282,000 last week. The number came in above forecasts and showed how deeply the coronavirus pandemic had impacted the economy, forcing layoffs. The dollar's weakness this week has helped Latam currencies lift from all-time lows they had been pushed to as the world panicked about the likelihood of a deep recession as lockdowns in many countries to contain the spread of the virus threatened to bring economic activity to a halt. Chile's peso firmed 1.2% in what could be its fourth day of gains, while Colombia's peso rose 1.5%. The optimism helped investors look past Brazil's central bank slashing its 2020 economic growth forecast for the country to zero percent from 2.2%. STOCKS RALLY TOO U.S. stocks indexes opened higher after the data, with most analysts saying the data had been more or less priced in with this being only the beginning of worse yet to come. Some others said it may force yet more stimulus measures. "This is a troubling number but given the non-farm payrolls survey week has already passed, the full ramifications will not be until the May release of the April employment report," said Ian Lyngen, head of U.S. rates strategy at BMO Capital, New York. Colombia stocks surged 5.3%, building on Wednesday's 13% jump. Sao-Paulo listed shares jumped 4.5% while those in Santiago rose 3.6%. MSCI's index of regional stocks up 5.5%, putting it on course for its best week in four years and break a five-week losing streak. Monex's FX analyst Simon Harvey points out that the U.S. jobs number is subject to a lot of noise as it is hard to filter out the increase in the structural unemployment rate from temporary claims due to the containment policies. Key Latin American stock indexes and currencies at 1406 GMT: Stock indexes Latest Daily % change MSCI Emerging 851.54 1.79 Markets MSCI LatAm 1697.20 5.35 Brazil Bovespa 78350.31 4.53 Mexico IPC 36022.04 1.37 Chile IPSA 3235.34 3.59 Argentina MerVal 0.00 0 Colombia COLCAP 1124.49 7.49 Currencies Latest Daily % change Brazil real 4.9970 0.69 Mexico peso 23.7300 0.85 Chile peso 836.9 0.91 Colombia peso 4010.48 1.33 Peru sol 3.4598 0.46 Argentina peso 64.2250 -0.27 (interbank) (Reporting by Susan Mathew in Bengaluru, additional reporting by Gertrude Chavez in New York Editing by Nick Zieminski)