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Brazil's Vale rises after Q3 profit beat

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Poll: Brazil c.bank to lift rates by 50 bps in Nov

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Argentina risk index breaks below 1,000-point barrier

(Updated at 2009 GMT)

By Shashwat Chauhan and Johann M Cherian

Oct 25 (Reuters) - Most Latin American currencies

slipped against a strengthening dollar on Friday, while domestic

economic woes and uncertainty about the outcome of upcoming U.S.

elections also dampened risk taking.

Brazil's real depreciated 0.7% to the dollar.

Investors sold off the currency earlier in the year on worries

of fiscal dominance in the region's largest economy along with

risk to central bank independence over monetary policy.

With price pressures also rising, a poll showed the local

central bank is set to increase its benchmark rate by 50 basis

points next month, contrasting with policy easing in most

markets across the world.

Mexico's peso also eased 0.9%. The country's Senate

passed a proposal which would make reforms to the Constitution

"unchallengeable" as ruling party Morena and allies push through

a swath of constitutional reforms, including a controversial

judicial overhaul.

Concerns around the judicial reform and a possible second

Donald Trump presidency following Nov. 5 U.S. elections rank the

peso among top underperformers in the region.

Colombia's peso weakened 0.8% and touched a fresh

one-year low, as investors priced in interest rate cuts by the

local central bank.

A

poll showed

analysts predict the central bank will choose to speed up

monetary easing in its Oct. 31 decision.

Currencies of copper producers Chile and Peru

slipped 0.1% and 0.4% respectively, tracking weak prices

for the red metal.

MSCI's index tracking currencies in Latin America

lost 0.2% and were set for weekly declines, as

markets flocked to the greenback and scaled back bets of large

interest rate cut in November by the U.S. Federal Reserve.

Trump's proposed policies on taxes and tariffs are seen as

inflationary, likely keeping U.S. interest rates high and

undermining the currencies of trading partners such as Mexico.

"Markets are now in a mini regime of heightened volatility

ahead of US elections, with polling outcomes still very close to

50-50," analysts at Citi wrote in a morning note.

"The risk appetite remains low as the results can be

binary, especially for some EM jurisdictions."

On the equities front, a gauge for Latin American stocks

lost 0.2%, with the Brazilian benchmark

dipping 0.1%.

Vale, one of the world's largest iron ore

producers, rose 3.6% after beating third quarter profit

estimates.

Meanwhile, Argentina's dollar-denominated sovereign bonds

maturing in 2029 rose more than 1.6 cents on the

dollar, last bid at 71.9 cents, aiding the MerVal equities

index's 1.3% rise.

A

risk index

that reflects how investors view the embattled country's

debt, broke below a key level of 1,000 basis points, the lowest

in at least four years.

Key Latin American stock indexes and currencies:

Latin American market prices from Reuters

MSCI Emerging Markets 1134.57 flat

MSCI LatAm 2164.22 -0.23

Brazil Bovespa 129890.05 -0.14

Mexico IPC 51817.12 0.04

Chile IPSA 6754.69 0.43

Argentina Merval 1875464.6 1.377

2

Colombia COLCAP 1334.49 -0.23

Brazil real 5.703 -0.68

Mexico peso 19.9651 -0.87

Chile peso 948.05 -0.13

Colombia peso 4330.17 -0.83

Peru sol 3.768 -0.43

Argentina peso (interbank) 984.5 0.10

Argentina peso (parallel) 1205 0.83