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Argentina to ask US court to overturn $16.1 bln YPF judgment

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Chile central bank holds benchmark interest rate at 4.75%

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Korean won, US ETFs gain after US trade deal

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US Fed cuts rates by 25 basis points

(Updates with afternoon trading prices)

By Johann M Cherian, Niket Nishant and Purvi Agarwal

Oct 29 (Reuters) - Latin American currencies were mixed on Wednesday as some weakened

against the dollar following the U.S. Federal Reserve's monetary policy decision, while assets

in resource-rich economies strengthened tracking higher commodity prices.

The Fed delivered an expected 25-basis-point cut, but Chair Jerome Powell said that a

December cut was far from assured. Investors dialed back on rate cut bets, standing at 71% from

90% before the decision.

"Our base case remains for the FOMC to reduce the rate by another 25 bps at its December

meeting... but with finely balanced risks around the inflation and employment objectives, a

deluge of data on the other side of the shutdown could quickly shift the outlook," said Wells

Fargo economists.

"Chair Powell does not think it is a slam dunk decision, and neither do we."

The dollar index extended its gains following the decision, but assets in LatAm

stayed resilient, tracking sharp gains in commodity prices, and as signs of thawing trade

tensions between U.S. and China buoyed sentiment.

Higher crude oil prices underpinned gains in currencies of oil major Colombia

while firmer copper prices also lifted currencies of top exporter Chile's peso.

Chile's peso also found support from the local central bank's decision on Tuesday to

leave benchmark interest rate unchanged at 4.75%.

Brazil's real pared early gains to trade 0.1% lower, while stocks

advanced 0.8%. Prices of iron ore - a top export item - hit two-week highs.

The Mexican peso reversed earlier gains to fall 0.4%, underperforming peers. Stocks

, however, hit an intraday record high and were last up 0.8%.

Argentina's peso resumed its rally, strengthening 2.3% against the dollar, while

its stocks jumped 5.6%.

President Javier Milei's party won the mid-term elections over the weekend, giving him more

time to execute his austerity agenda and cementing U.S. support that was hanging in the balance,

sparking a rally in local assets.

"Counterintuitively, there's more uncertainty in Argentina ... There aren't any decisive

elections in the next two years and the path is open towards growth and it has really attractive

valuations," said Malcolm Dorson, head of emerging markets at Global X ETFs.

Still, investors factored in bearish bets on the peso, expecting that the currency could

depreciate close to 2,000 per dollar over the next 12 months.

Focus will be on a U.S. appeals court verdict later in the day that will consider whether

Argentina must pay investors $16.1 billion after seizing control of YPF more than a

decade ago.

A ruling favoring investors could further cripple the debt-ridden economy.

MSCI's index tracking regional currencies slipped 0.1%, after hitting an

all-time high against the dollar. An index tracking regional bourses

gained 0.7% to touch its highest since April 2024.

Elsewhere, Trump reached an agreement with South Korea, following which a U.S.-listed

exchange-traded fund tracking Korean equities rose 2.2%, while the won firmed,

hitting its highest in one week.

Jamaican dollar bonds were down 1.6 cents and 1 cent on

the dollar as investors weighed the potential costs to the country in repairing the extensive

infrastructure damage caused by Hurricane Melissa.

Key Latin American stock indexes and currencies:

Latin American market

prices from Reuters

MSCI Emerging Markets 1414.01 0.81

MSCI LatAm 2578.79 0.67

Brazil Bovespa 148665.64 0.84

Mexico IPC 63312.39 0.82

Argentina Merval 2821346.1 5.65

7

Colombia COLCAP 1983.94 0.33

Brazil real 5.3628 -0.09

Mexico peso 18.4736 -0.36

Chile peso 940.59 0.18

Colombia peso 3878.5 0.36

Peru sol 3.3938 -0.14

Argentina peso (interbank) 1436 2.34

Argentina peso (parallel) 1440 0.69