* Local stocks, and FX headed for weekly losses

* Colombia's peso headed for its fifth week of gains

* Peru's Keiko Fujimori on track to win presidency

(Updates with afternoon trading levels)

By Avinash P

June 19 (Reuters) - Most Latin American assets were headed

for weekly losses on Friday, with investors weighing

developments regarding the U.S.-Iran interim peace deal in a

holiday-affected session.

Israel and Hezbollah agreed to a ceasefire in Lebanon, a

U.S. official said. Earlier on Friday, an escalation in fighting

there had led to the cancellation of U.S.-Iran talks aimed at

securing a lasting peace deal in the Middle East.

MSCI's index tracking regional currencies

inched up 0.1% and the stocks benchmark dipped

0.2%. Both indexes had fallen over 1% each in the previous

session and were set for weekly losses.

While markets initially welcomed hopes of an imminent end to

the conflict, the lack of details on the peace deal left

investors cautious.

Brazil's real climbed 0.3%, set to snap a four-day

losing streak and the Mexican peso appreciated 0.1%. Both

however, were set for heavy weekly losses.

Regional currencies were hit hard earlier this week as the

dollar appreciated after the U.S. Federal Reserve held its main

lending rate steady and policymakers' projections showing a rate

hike in 2026.

Trading volumes are expected to be light as markets in the

U.S. were closed for a public holiday.

ELECTIONS IN FOCUS

Elections in Latin America could become one of the major

catalysts for assets.

In Colombia, right-wing candidate Abelardo De La Espriella

faces off against leftist Senator Ivan Cepeda in Sunday's

presidential runoff.

"We have seen that the right will very likely win. The

market has reacted a bit, but there is more room for further

performance after the second round if the victory of the right

wing is confirmed," said Guillaume Tresca, global EM strategist

at Generali Asset Management.

"So we can maybe see a kind of honeymoon period for Colombia

in the next one or two months."

The two candidates offer contrasting paths for the country.

De La Espriella, who led in the first round of voting, advocates

for a security-first approach and more business-friendly

policies.

Cepeda seeks to build on President Gustavo Petro's social

and economic reforms and negotiate peace with armed groups.

Bogota's main stock index jumped 2.4%, hitting its

highest level in over two months while the local peso

depreciated 0.6%. The currency however, was poised for its fifth

straight week of gains, its longest such streak in two months.

Brazil is headed for elections in October. Senator Flavio

Bolsonaro is banking on a crime crackdown to win over

independent voters and shore up his base, as he looks to close

the gap with incumbent President Luiz Inacio Lula da Silva.

Bolsonaro's popularity took a hit after reports linked the

right-wing candidate to a jailed banker, rattling local assets.

Investors are highly sensitive to headlines that undermine

the chances of a market-friendly government gaining power, given

Brazil's deteriorating public finances under Lula.

Market favorite Keiko Fujimori was on track to win Peru's

presidency by a narrow but growing margin. Stocks

rose 0.8%, while the sol firmed.

Chile's stocks edged higher 0.4%, and the currency

was flat.

Key Latin American stock indexes and currencies:

Equities Latest Daily %

change

MSCI Emerging Markets 1783.73 -0.35

MSCI LatAm 2960.7 -0.18

Brazil Bovespa 168570.58 0.17

Mexico IPC 67675.41 -0.86

Chile IPSA 10881.47 0.4

Argentina Merval 3294296.18 -1.2

Colombia COLCAP 2464.49 2.43

Currencies Latest Daily %

change

Brazil real 5.152 0.28

Mexico peso 17.317 0.13

Chile peso 900.89 -0.01

Colombia peso 3453.6 -0.61

Peru sol 3.3807 0.02

Argentina peso (interbank) 1463 -0.82

Argentina peso (parallel) 1460 1.71