*

Dollar rises after report Trump considering emergency

announcement for tariffs

*

Brazil industrial production falls in November

*

Argentina privatizes IMPSA

*

MSCI Latam FX down 0.6%, stocks off 1.6%

(Updates through mid-afternoon trade)

By Lisa Pauline Mattackal and Purvi Agarwal

Jan 8 (Reuters) - Indexes tracking Latin American stocks

and currencies fell on Wednesday, as expectations for

higher-for-longer U.S. interest rates and fresh concerns about

President-elect Donald Trump's tariff plans lifted the dollar

and U.S. Treasury yields.

The MSCI index of Latin American currencies

fell 0.6%, on pace for its worst day in over two weeks.

An index tracking stocks in the region

was down 1.6%, set for its worst day since Dec. 18, when the

U.S. Federal Reserve flagged a more cautious pace of interest

rates year.

CNN reported that U.S. President-elect Donald Trump is

considering declaring a national economic emergency to provide

legal justification for a series of universal tariffs on allies

and adversaries, lifting the already rising dollar index.

Data showed that industrial production in Brazil fell for

the second month in a row in November. Meanwhile, central bank

data showed the country registered its largest dollar net

outflows since 2020 in 2024 as worries about Brazil's fiscal

policies unnerved investors.

The Brazilian real weakened 0.2% against the dollar

on the day. The country's main stock index was down

1.5%, on pace for its worst day in three weeks.

"Sentiment around Brazil's deficit outlook (is) dependent on

robust growth... any growth disappointments, coming from

internal or external shocks, will reignite debt concerns," said

Thierry Wizman, Global FX & Rates Strategist at Macquarie.

EM markets had kicked off the week with gains, as the dollar

weakened on reports that Trump's tariff could be less aggressive

than expected, even after the President-elect refuted the

claims.

They have since retraced much of that move, with a bond

selloff lifting U.S. Treasury yields as tariff worries

compounded expectations of a more cautious pace of rate cuts

from the U.S. Federal Reserve.

Higher U.S. rates dim the appeal of riskier, but

relatively higher-returning emerging market assets.

"To say this is a challenging backdrop for EM equities

may be an understatement, unless there is a specific reason for

a given EM to do well ... this backdrop means money should flow

back to the US," said Geoffrey Dennis, an independent emerging

markets commentator.

Mexico's peso lost 0.5%, while its main stock index

dipped 0.9%. The U.S. is the country's largest trading

partner.

The Colombian peso pared initial losses to rise

0.3%, while the Chilean peso was up 0.4%.

In Argentina, the government

privatized

metallurgical firm IMPSA, marking its first privatization

since libertarian President Javier Milei took office.

HIGHLIGHTS

** Trump will not rule out force to take Panama Canal,

Greenland

** Argentina industrial output dips 1.7% in November

Key Latin American stock indexes and currencies at 1950 GMT:

MSCI Emerging Markets 1070.15 -0.92

MSCI LatAm 1876.77 -1.57

Brazil Bovespa 119402.17 -1.45

Mexico IPC 49660.32 -0.85

Chile IPSA 6762.74 -0.64

Argentina Merval 2785612.4 -1.296

5

Colombia COLCAP 1412.91 -0.44

Brazil real 6.1101 -0.15

Mexico peso 20.4113 -0.5

Chile peso 1000.06 0.41

Colombia peso 4325.68 0.34

Peru sol 3.7725 0.05

Argentina peso (interbank) 1035.5 0

Argentina peso (parallel) 1200 1.25