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

By Susan Mathew and Sruthi Shankar

(Adds latest market numbers, comments) By Susan Mathew and Sruthi Shankar Nov 1 (Reuters) - Most Latin American currencies made healthy gains 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 the United States and China lifted global sentiment. Brazil's real rose 0.3% to just below 4 per dollar. The currency was on track to post a second straight week of gains, boosted by optimism over the Brazilian Senate's final approval of a pension reform bill and the central bank hinting at a pause on further interest rate cuts. "Progress on the reform agenda should continue removing risk premium from Brazilian assets," Claudio Irigoyen at Bank of America Merrill Lynch wrote in a client note. "Furthermore, the government's scheduled auction of "transfer of rights area" (TOR) fields in November could represent a substantial inflow of dollars to the economy, which should strengthen the currency." A blockbuster auction of oil prospecting rights for the enormous offshore transfer of rights area is set to take place on Nov. 6. The winning bidders will be obliged to pay the government a combined signing bonus of some 106.5 billion reais ($25.8 billion). The dollar had gained ground after data showed U.S. job growth slowed less than expected in October. But gains were dented by weak U.S. manufacturing activity. Signs the United States and China may be close to reaching a trade deal also knocked demand for the safe-haven dollar. Surprisingly upbeat factory activity data from China also alleviated some fears of a complete downturn in global growth. Brazil's shares shot to new highs, with stock of pulp and paper company Suzano topping the main index after reporting quarterly results. Iron ore miner Vale rose as it said operations at its Alegria mine were set to restart. Mexico's peso rose 0.5% and the Colombian peso firmed by 1.8, taking MSCI's index of Latam currencies up 0.4% on the day and the week. Chile markets were closed for a national holiday. Key Latin American stock indexes and currencies at 1954 GMT: Stock indexes Latest Daily % change MSCI Emerging Markets 1049.09 0.68 MSCI LatAm 2813.83 1.31 Brazil Bovespa 108193.60 0.91 Mexico IPC 43810.67 1.09 Chile IPSA - - Argentina MerVal 35929.30 2.669 Colombia IGBC 13349.82 0.58 Currencies Latest Daily % change Brazil real 3.9942 0.34 Mexico peso 19.1190 0.57 Chile peso - - Colombia peso 3318.5 1.76 Peru sol 3.344 0.00 Argentina peso (interbank) 59.6500 0.05 (Reporting by Susan Mathew and Sruthi Shankar in Bengaluru; Editing by Rosalba O'Brien)