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EMERGING MARKETS-Latam markets rally as upbeat U.S., China data lift sentiment

By Susan Mathew

By Susan Mathew Nov 1 (Reuters) - Most Latin American currencies made healthy gains against a steady dollar on Friday, putting an index of regional currencies on track for a third week of gains, while Brazil stocks scaled new highs as positive data from U.S. and China lifted global sentiment. Brazil's real rallied 1% and led gains among regional currencies, while Mexico's peso 0.6%, taking MSCI's index of Latam currencies up 0.7% on the day and the week. The dollar gained some ground after data showed U.S. job growth slowed less than expected in October, while wages gained and hiring in the prior two months was stronger than previously estimated. This latest sign of strength in the U.S. economy buoyed Wall Street as well and followed surprisingly upbeat factory activity data from China, alleviating some fears of a complete downturn in global growth. Brazil's shares shot to new highs with shares of pulp and paper company Suzano topping the main index after reporting quarterly results. Iron ore miner Vale was the biggest boost with operations at its Alegria mine as well as its joint venteure Samarco with BHP set to restart. Brazil's real looked to post its best day a week and a half, despite data showing the country's manufacturing sector expanded at a weaker pace in October. "We're watching for prospective inflows stemming from the November 6 Transfer of Rights auction to help to reverse the recent FX outflows trend," said Morgan Stanley analysts in a note. "We are also keeping an eye on the potential economic package to be announced by the administration in the coming days, as growth-supportive measures are likely to provide a further boost for the currency." The currency was on track to post a second straight week of gains, and while Mexico's peso firmed on the day, it was set to break a four week winning streak. Chile's peso posted a second week of losses as domestic unrest on economic inequality dented appetite for the country's assets. Colombia's peso lurked at three months highs on day. Key Latin American stock indexes and currencies at 1341 GMT: Stock indexes Latest Daily % change MSCI Emerging Markets 1048.65 0.64 MSCI LatAm 2813.85 1.31 Brazil Bovespa 108227.84 0.94 Mexico IPC - - Chile IPSA - - Argentina MerVal - - Colombia IGBC - - Currencies Latest Daily % change Brazil real 3.9765 0.79 Mexico peso 19.1271 0.53 Chile peso 740.95 0.15 Colombia peso 3346.62 0.91 Peru sol - - Argentina peso 59.6000 0.13 (interbank) (Reporting by Susan Mathew in Bengaluru;)