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Latin American currencies up 0.6%, stocks up 1.4%

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Brazil agrees to fast-track two fiscal package proposals

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Eletrobras jumps as mediation with Brazil government

advances

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EU chief in South America to seal trade deal with Mercosur

(Updates to afternoon trading)

By Pranav Kashyap and Johann M Cherian

Dec 5 (Reuters) - Most Latin American currencies gained

on Thursday as the U.S. dollar edged lower, while Brazil's real

and local stock index got a lift on expectations that the local

government will attempt to approve its fiscal package this year.

The Brazilian real rose 0.7% against the U.S. dollar,

is third consecutive day of advances, as the currency recovered

some declines after dropping to a record low in the previous

week.

Brazil's Chamber of Deputies approved a decision to

fast-track two proposals from the government's fiscal package

that aim to streamline processes by eliminating certain

deadlines.

One of the proposals allows the government to limit the

use of tax credits in the event of a public account deficit,

enhancing the fiscal framework.

In the following week, markets will also be keyed in on a

Senate Committee's confirmation hearings for three top central

bank officials chosen by President Luiz Inacio Lula da Silva.

Eduardo Ordonez Bueso, an emerging markets debt portfolio

manager at BankInvest, said the credibility of the Brazilian

currency has been evaporating and will need a few months of

strong monetary policy with interest rate hikes to "get people

more excited."

"There can be some relief ... but if nothing serious comes

through, we might see a little pressure," he added.

Brazil's Bovespa added over 1.4%, aiding a 1.6% in

the broader Latin American stocks index. Both

indexes touched a one-week high.

Brazil's Eletrobras rose 4.3% on a

decision on funds for the country's Energy Development Account.

More broadly, MSCI's index for Latin American currencies

climbed 0.6% and touched a one-week high.

Mexico's peso edged up 0.4%. Mexican President

Claudia Sheinbaum said she would expect to reach an agreement

with the incoming Trump administration to send any migrants

deported by the U.S. back to their countries of origin.

Bueso also noted that the peso might trade sideways until

there are some announcements regarding U.S. trade policy under

the new administration.

President-elect Donald Trump's threats to impose 25% tariffs

on U.S. imports from Mexico have sparked significant volatility

in the currency, with the peso down over 15% so far this year.

Oil exporter Colombia's peso firmed 0.4%, while

currencies of copper exporter Chile and Peru

firmed 0.4% and 0.3%, respectively.

In broader news, European Commission President Ursula von

der Leyen was in Latin America to finalize a trade deal between

the European Union and Mercosur.

Mercosur countries will meet in Montevideo later on Thursday

amid signs that Argentina, Brazil, Paraguay and Uruguay will use

the event to announce the conclusion of the biggest trade deal

ever reached by the EU in terms of tariff reductions.

Among other bourses, Mexico's benchmark stock index

added 1.2% and hit a three-week high and marked its fourth

consecutive session in advances.

Key Latin American stock indexes and currencies

Latin American market

prices from Reuters

MSCI Emerging Markets 1102.25 0.16

MSCI LatAm 2033.97 1.57

Brazil Bovespa 127908.51 1.44

Mexico IPC 51878.95 1.23

Chile IPSA 6660.14 0.43

Argentina Merval 2212895.0 -0.153

6

Colombia COLCAP 1387.82 0.29

Brazil real 5.9952 0.76

Mexico peso 20.1945 0.41

Chile peso 969.8 0.43

Colombia peso 4418.3 0.43

Peru sol 3.724 0.37

Argentina peso (interbank) 1012 0.05

Argentina peso (parallel) 1035 4.17