* Brazil posts narrower-than-expected May current account

deficit

* MSCI LatAm currencies, stocks on track for weekly losses

* Colombian stocks eye sharpest weekly fall in over five

years

* Brokers estimate over $10 bln in economic damage from

Venezuela disaster

(Updates with late afternoon trading)

By Ragini Mathur and Avinash P

June 26 (Reuters) - Most Latin American currencies were

mixed on Friday, as a dollar rally that had pressured riskier

assets earlier in the week showed signs of fading, while a

rebound in precious and base metals lifted the resource-rich

region's stocks.

MSCI's regional currency index gained 0.3%,

though it remained on track for a weekly loss.

The dollar had surged to a 13-month high on Wednesday

as traders bet that a resilient U.S. economy would keep

short-term interest rates elevated.

However, the greenback has since lost momentum and was

headed for a second straight daily decline after Thursday's U.S.

data tempered expectations for further Federal Reserve rate

hikes this year.

Venezuela was also in focus after devastating earthquakes

added to concerns over the country's already elevated debt

restructuring and political risks.

Economic losses from the earthquake could exceed $10

billion, with brokers warning that low insurance penetration

means the bulk of the damage will fall on an already fragile

economy.

A United Nations preliminary assessment estimates $6.7

billion in direct economic damage caused by the earthquakes.

Some sovereign bonds came under strain on Friday.

"It is going to be a complex restructuring process. The

earthquake doesn't make that better," said Rachel Ziemba,

geopolitical and macro risk analyst and founder of Ziemba

Insights.

"That's one of the reasons that we've seen some bondholders

cut their losses."

A broad energy contract review tied to Venezuela's sweeping

hydrocarbons law overhaul, aimed at attracting investment and

boosting production, had been expected to conclude in late July,

though reconstruction needs could delay it, sources and analysts

said.

Elsewhere in LatAm, Brazil's benchmark Bovespa rose

0.8%, set for its biggest weekly jump since early April, while

the real was up 0.2%. The country's current account

deficit narrowed to $3.185 billion in May, central bank data

showed, compared with the $4.159 billion shortfall expected in a

Reuters poll.

In Peru, the sol rose 0.3% against the dollar, helped

by a rebound in gold prices, a key export for the country.

Markets were also watching the presidential election, where

right-wing candidate Keiko Fujimori appeared to have built an

insurmountable lead in a razor-thin runoff.

That result would make Peru the latest Latin American

country to shift rightward.

Earlier this week, Colombia's right-wing outsider Abelardo

De La Espriella narrowly won the presidency, though the tight

result is expected to constrain his agenda and force him to seek

compromises in a divided Congress.

"We're still in a wait-and-see mode about how the new

government is going to evolve. The question mark is whether they

can deliver on the promises," Ziemba said.

Colombia's COLCAP index edged 1.1% higher but was

on track for its steepest weekly fall since March 2020, while

the peso slipped 0.2%.

In Chile, stocks gained 0.6%, while the peso

fell 0.7%. Copper prices reversed early losses and traded

higher, supported by a weaker dollar and lower inventories

despite broader pressure from equity markets.

MSCI's broader Latin American equities index

rose 0.9% on the day but was set for marginal weekly losses.

Key Latin American stock indexes and currencies:

Latin American market

prices from Reuters

Equities Latest Daily %

change

MSCI Emerging Markets 1707.37 -2.78

MSCI LatAm 2961.4 0.91

Brazil Bovespa 173296.43 0.76

Mexico IPC 67221.54 -0.29

Chile IPSA 10766.1 0.57

Argentina Merval 3120614.8 0.79

Colombia COLCAP 2286.79 1.12

Currencies Latest Daily %

change

Brazil real 5.1673 0.19

Mexico peso 17.5003 -0.07

Chile peso 923.23 -0.27

Colombia peso 3436.9 -0.16

Peru sol 3.4084 0.34

Argentina peso (interbank) 1477 0

Argentina peso (parallel) 1495 0.99