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Trump-Putin talks begin in Alaska

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Peru's central bank holds key interest rate at 4.5%

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Colombia inflation undershoots estimates

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MSCI Latam FX, stocks set for second week of gains

(Updates with afternoon levels)

By Pranav Kashyap, Sukriti Gupta and Purvi Agarwal

Aug 15 (Reuters) - Most emerging market currencies were

subdued on Friday as investors anticipated the outcome of

high-stakes ongoing U.S.-Russia talks, while those in Latin

America strengthened on prospects of lower U.S. interest rates.

U.S. President Donald Trump and his Russian counterpart

Vladimir Putin begun the key meeting in Alaska, where Trump

seeks a ceasefire between Russia and Ukraine.

Trump said he would not negotiate on behalf of Ukraine and

would let Kyiv decide whether to engage in territorial swaps

with Russia, assuaging European concerns that he would sell out

Ukraine by recognizing Russian control over territories.

Ukraine's dollar bonds have rallied since the announcement

of the meeting, as progress on ending the over three-year-long

war seemed promising. However, they have had a volatile week

leading up to the meeting, broadly gaining 0.7 cents on the

dollar on Friday.

Russia's rouble slipped 0.5% to a more than one-week

low against the dollar, over-the-counter market data showed.

"Unless there is a dramatic result like a break in the

discussions, which I do not assign a high probability to

materialize, markets are going to take it okay," said Alfredo

Coutino, director for Latin America at Moody's Analytics.

"If there is a willingness to continue the dialogue and to

continue negotiating, markets are going to stay relatively

calm."

In Latin America, most currencies edged up against the

dollar, as markets priced in a 25-basis-point cut from

the Federal Reserve in September.

Hopes of a jumbo 50-bps cut were nipped in the bud after

mixed economic data this week, the latest being an in-line

reading of retail sales.

"Markets are trading based on economic data and sentiment

towards what the Fed is going to be doing rather than the summit

... If it weren't a summer Friday, markets would be a little

more volatile," said Brendan McKenna, economist at Wells Fargo.

On the day, Colombia's peso hit nearly a one-month

high and was poised for its biggest daily jump in two weeks.

Data showed Colombia's economy grew 2.1% year-on-year in the

second quarter, below market expectations.

Other Latam currencies gained between 0.1% and 0.3%.

Brazil's real was on track for a fourth week of gains.

MSCI's Latin American currency gauge gave up

early gains and was last flat, while a similar gauge for stocks

rose 0.6%. Both indexes were set for a second

consecutive week of gains.

Colombian stocks rose 0.3%, in their eighth

straight session of gains, their longest streak since last

August.

Peruvian stocks rose 0.4%, while the sol

currency was slightly higher in thin trading after the

country's central bank held its key interest rate at 4.50% for

the third successive time.

Argentina's markets were closed for a local holiday.

Voters in Bolivia will go to the polls on Sunday to elect a

new president, vice president and all members of the country's

legislature. Investors hope that a political U-turn could help

shore up Bolivia's fragile economy and pave the way for an IMF

program.

Key Latin American stock indexes and currencies:

MSCI Emerging Markets 1271.12 -0.07

MSCI LatAm 2339.23 0.60

Brazil Bovespa 136352.71 0

Mexico IPC 58370.61 0.35

Chile IPSA 8739.42 0.02

Argentina Merval 2188542.39 -4.33

Colombia COLCAP 1856.83 0.61

Currencies Latest Daily %

change

Brazil real 5.397 0.34

Mexico peso 18.7355 0.28

Chile peso 962.08 0.3

Colombia peso 4015.5 1.06

Peru sol 3.5575 0.14

Argentina peso (interbank) 1298 -1.77

Argentina peso (parallel) 1300 -0.38