*

Trump threatens tariffs on auto, chips and pharmaceuticals

*

South Africa's budget postponed due to coalition disagreement

*

Former Brazilian president charged in alleged coup plot

*

MSCI's Latin American currencies index down 0.4%, stocks fall 1%

By Purvi Agarwal

Feb 19 (Reuters) - A rising dollar pressured most Latin American currencies on Wednesday as investors assessed U.S. President Donald Trump's latest tariff threats, while South African markets fell after the country's national budget was postponed.

MSCI's gauge of Latin American currencies was down 0.4%, on track to snap a six-session winning streak. The stocks index lost 1%.

In yet another round of threats, Trump said he intends to impose auto tariffs "in the neighborhood of 25%" and similar duties on semiconductors and pharmaceutical imports, following the duties on steel and aluminum imports announced earlier this month.

Trump had suspended his February 1 tariffs on Mexico and Canada, shortly after announcing them, following border security agreements with the two U.S. allies. This led investors to view the tariffs primarily as a negotiating tool.

Initial optimism around developments in the U.S.-Russia relationship and delayed U.S. tariffs faded, giving way to a slightly higher dollar.

"The sentiment on the USD has become a little more moderate, as many in the market see potential pathways to a weaker dollar under Trump, but no one seems willing to commit to the idea just yet," said Brad Bechtel, global head of FX at Jefferies.

The Mexican peso led declines with a 0.8% fall. Colombia's peso lost 0.1%, with higher oil prices limiting its declines.

Meanwhile, South Africa's rand weakened 0.9% after the government's national budget was postponed at the last minute because of a disagreement between the political parties in the ruling coalition.

The delay triggered the sharpest selloff in the country's government bonds since December, with the 2052 maturity down as much as 1 cent.

The benchmark 2030 government bond also was weaker, with the yield up 6.5 basis points at 9.19%. Stocks fell 0.3%.

"(The delay) suggests that it is domestic rather than foreign policy where the cracks in the coalition lie ... the government of national unity's fragility will make fiscal consolidation and structural efforts even harder to push through," said David Omojomolo, Africa economist at Capital Economics.

Brazil's real was flat. Former Brazilian President Jair Bolsonaro was charged with leading a plot to overthrow the government after his 2022 election loss.

Chile's peso was off 0.4%, as copper prices eased.

However, J.P. Morgan said equity markets in Argentina and Turkey could post returns of more than 20% this year, driven by policy reforms aimed at reducing inflation levels.

Developments in the Russia-Ukraine conflict and the ceasefire between Israel and Hamas also were being watched, alongside the minutes of the U.S. Federal Reserve's last meeting, which are due to be released at 2 p.m. EST (1900 GMT).

Argentina's Merval stock index fell 1.1%, and indexes in Brazil and Mexico fell 0.7% and 0.8%, respectively.

Separately, S&P Global Ratings revised its policy rate forecasts for 2025 and 2026 for nine key emerging markets, including Brazil and Mexico, with a median shift of 50 basis points higher.

Highlights:

** China promises Latin America 'trustworthy' ties as Trump lays out demands

** China unveils action plan to stabilise foreign capital

** Polish consumer sentiment improves in Feb, but worries about future rise

** Brazil raises $2.5 billion with 6.75% yield in global bond sale with 10-year dollar issuance

Key Latin American stock indexes and currencies at 1505 GMT:

Equities Latest Daily %

change

MSCI Emerging Markets 1137.31 -0.14

MSCI LatAm 2106.02 -0.99

Brazil Bovespa 127648.92 -0.69

Mexico IPC 54045.76 -0.79

Chile IPSA 7262.51 -0.49

Argentina Merval 2365696.1 -1.09

9

Colombia COLCAP 1576.29 -0.02

Currencies Latest Daily %

change

Brazil real 5.6928 -0.06

Mexico peso 20.3989 -0.79

Chile peso 952.12 -0.43

Colombia peso 4097 -0.14

Peru sol 3.6768 0.07

Argentina peso (interbank) 1058.25 0

Argentina peso (parallel) 1205 2.49