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MSCI Latin American currencies index near one-year high

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Brazil's central bank signals prolonged high rates

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US to remove Syria sanctions, secures Saudi Arabian

investment

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China offers Latin America, Caribbean billions to rival US

influence

(Updates with mid-session trading)

By Nikhil Sharma, Johann M Cherian and Purvi Agarwal

May 13 (Reuters) - Most Latin American assets gained on

Tuesday, with higher commodity prices providing a boost after a

temporary reprieve in Sino-U.S. trade tensions, while investors

monitored developments from U.S. President Donald Trump's tour

of the Gulf region.

MSCI's index for regional currencies jumped

1.2% to a near one-year high against the dollar, as the

greenback eased following strong gains on Monday.

Data showing that U.S. consumer inflation rose moderately in

April also weighed on the dollar.

Global financial markets started the week on a firm note

after the U.S. and China reached an agreement to temporarily

slash tariffs. The U.S. said it would cut "de minimis" tariff

for low-value items imported from China.

Trade uncertainty lingered because tariffs remain higher

than last year, but optimism from the deal boosted commodity

prices, helping export-heavy Latam economies.

Brazil's real jumped 1.3%, tracking prices of top

export item iron ore. Minutes from the latest meeting of the

country's central bank's showed policymakers were inclined to

keep borrowing costs elevated for an extended period.

Mexico's peso rose 1.3%, trading at its highest since

mid-October, while Colombia's currency rose 0.1% - both

tracking higher crude prices, which climbed more than $1 a

barrel.

Meanwhile, Trump announced that the U.S. will lift

long-standing sanctions on Syria, and secured a $600 billion

commitment from Saudi Arabia to invest in the U.S. on his Gulf

trip.

The Saudi Arabian stock index closed up 0.4%.

Peru's sol edged 0.2% lower. The country's economic

minister Jose Salardi was stepping down.

Commodity-linked companies in the region such as Brazil's

Vale, Colombia's Ecopetrol and Argentina's

YPF gained on surging commodity prices.

Petrobras was 1.7% higher after the Brazilian

state-run oil company posted a higher quarterly net profit and

announced about $2.1 billion in dividends.

Brazil's Bovespa hit a record high in the day,

helping MSCI's gauge of LatAm stocks gain 2.8% -

its highest since September.

"Latam will see greater demand for commodities and commodity

exports to China (if EMs in Asia see strong currencies and lower

rates) and that will help Brazil, Argentina, Chile the most,"

said Brad Bechtel, global head of FX at Jefferies.

"We are likely to see currency strength in Latam as well,

which should provide further scope for rate reductions in the

region."

Fitch upgraded Argentina's long-term foreign-currency and

local-currency issuer default rating to "CCC+" from "CCC", but

bonds remained steady and the currency rose with

peers.

The deputy governor of Argentina's central bank said he

expected a slowdown in prices in April to continue into May.

Traders were also monitoring a Community of Latin American

and Caribbean States' forum, where China's President Xi Jinping

vowed to disburse 66 billion yuan ($9.18 billion) in credit to

boost China's footprint in Latin America.

Elsewhere, India's rupee dipped after slowing

inflation data paved the way for more interest rate cuts, while

South Africa's rand was lower after data showed a jump in

unemployment.

Latin American market

prices from Reuters

Equities Latest Daily %

change

MSCI Emerging Markets 1158.23 -0.31

MSCI LatAm 2281.87 2.78

Brazil Bovespa 139136.79 1.88

Mexico IPC 57405.57 1.13

Chile IPSA 8343.93 0.21

Argentina Merval 2282563.6 2.339

6

Colombia COLCAP 1701.47 2.79

Currencies Latest Daily %

change

Brazil real 5.6005 1.31

Mexico peso 19.3758 1.31

Chile peso 938.68 0.77

Colombia peso 4217.5 0.13

Peru sol 3.666 -0.22

Argentina peso (interbank) 1125 0.6222222

22

Argentina peso (parallel) 1140 2.6315789

47