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Brazil's top court to mediate dispute over tax

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Ethiopia agrees $1 bln deal with World Bank

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MSCI Latam FX, stock indexes set for weekly gains

By Purvi Agarwal

July 4 (Reuters) - Most Latin American currencies

steadied on Friday as investors refrained from placing major

bets with little clarity on how U.S. President Donald Trump's

tariffs will be implemented as a July deadline nears.

Trump said that his administration will send letters to 10

to 12 countries on Friday, informing them of tariff rates their

exports would face after the July 9 deadline expires.

"Countries or territories threatened with higher tariffs may

experience such tariffs lasting only days or weeks," said John

Raines, head of North America economics and Country Risk at S&P

Global Market Intelligence.

"The (Trump) administration may back down as a result of

adverse market conditions, or if it perceives that negotiations

have progressed positively."

In Latin America, Mexico is among the most exposed to

Trump's tariffs as other countries export less to the U.S. than

they do to Asia.

This has led investors to view Latam as relatively safe,

shielded from significant economic harm from Trump's sweeping

duties.

MSCI's index tracking Latin American currencies

was little changed, but was set for its fifth

consecutive week of gains.

The dollar index was down 0.1% on the day, still

trading around multi-year lows.

Trading was expected to be thin with U.S. markets shut for

the July 4 holiday.

Moreover, some concerns over the fiscal health of the U.S.

remained after Congress passed Trump's tax-cut and spending

package on Thursday. It is expected to add over $3 trillion to

the country's $36.2 trillion debt, according to the nonpartisan

Congressional Budget Office.

Mexico's peso was down 0.1% and Brazil's real

was flat.

The real was on track for its fifth week of gains, its

longest win streak since February this year.

Brazil's Supreme Court Justice called a mediation hearing

between the government and Congress on July 15 to address a

dispute over President Luiz Inacio Lula da Silva's decree to

increase tax on IOF transactions.

The administration has been trying to implement more tax

rules to help maintain fiscal discipline ahead of national

elections in 2026.

The currency in Chile, the world's largest copper

producer, fell 0.4%, tracking prices of the red metal.

Colombia's currency was an outlier, up 0.1%, while

Peru's sol gained 0.3% against the greenback in low

volumes.

Stocks were mixed but moves were muted across the board.

Mexican equities were flat, while ones in Colombia

edged 0.1% lower. Brazil's main share index

was up 0.2%.

MSCI's Latam stocks index was up 0.2%,

headed for a weekly gain.

Elsewhere in emerging markets, Ethiopia signed a $1 billion

financing agreement with the World Bank to support its economic

reform program and boost growth.

Key Latin American stock indexes and currencies:

Latin American market

prices from Reuters

Equities Latest Daily %

change

MSCI Emerging Markets 1230.76 -0.5

MSCI LatAm 2390.17 0.19

Brazil Bovespa 141159.06 0.16

Mexico IPC 58036.35 0.25

Chile IPSA 8289.27 -0.02

Argentina Merval 2081791.8 0.18

Colombia COLCAP 1682.93 -0.07

Currencies Latest Daily %

change

Brazil real 5.4086 -0.01

Mexico peso 18.634 -0.11

Chile peso 932.21 -0.42

Colombia peso 3985 0.06

Peru sol 3.535 0.25

Argentina peso (interbank) 1232 0

Argentina peso (parallel) 1210 2.07

(Reporting by Purvi Agarwal in Bengaluru; Editing by Emelia

Sithole-Matarise)