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Mexican peso trades near one-month low after Trump tariffs

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Markets in Brazil, Argentina shut for public holiday

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Ukraine bonds recover; report says US-Ukraine plan to sign

deal

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MSCI Latam stocks flat, FX off 0.3%

(Updates with mid-session trading)

By Shashwat Chauhan and Purvi Agarwal

March 4 (Reuters) - The Mexican peso was trading around

its lowest level in a month on Tuesday, after U.S. President

Donald Trump's long-threatened trade levies on Mexico, Canada

and China took effect, fanning fresh global trade tensions.

Trump's new 25% tariffs on imports from Mexico and Canada -

after an initial 30-day pause - went live at 12:01 a.m. (0501

GMT), along with a doubling of duties on Chinese goods to 20%.

The peso hit a one-month low, but was well-off its

session lows at 0.2% lower against the dollar. One-month implied

volatility on the currency stood at its highest

since February 5.

Mexican President Claudia Sheinbaum vowed retaliatory

measures, while Canada announced immediate 25% tariffs on C$30

billion worth of U.S. imports with more coming if need be.

Mexican stocks, however, reversed early losses

and were last up 1%, after falling to their lowest level in more

than a month.

"Currently the market is really not really pricing in

much of an impact from tariffs, simply because it's thinking

that both sides will come to some sort of agreement and the

tariffs will be rolled back," said Brad Bechtel, global head of

FX at Jefferies.

"They are just wondering how long tariffs are going to

be in place... the longer they stay, the weaker the currency

will become."

Mexico's exports to the U.S. account for around 80% of its

total exports and a quarter of its GDP, according to analysts at

Capital Economics. They expect Mexico's economy to contract by

around 1% this year if the 25% tariffs stay in place.

China slapped additional tariffs of 10%-15% on certain U.S.

imports from March 10 and a series of new export restrictions

for designated U.S. entities.

Any impact on the Chinese economy will be watched, as it is

one of the world's largest consumers of commodities that are

heavily exported by Latin American economies.

Top copper producer Chile's peso edged 0.7% higher,

while the Colombian peso dipped 0.6% in low volumes.

MSCI's gauge for Latin American currencies

was off 0.3%, while the stocks index was flat.

Equity markets in Brazil and Argentina were closed a second

day this week for a public holiday.

Elsewhere, Ukraine's international bonds pared losses and

rose over 1 cent each, with the one maturing in 2034

up 1.26 cents to be bid at 57.69 cents to the

dollar.

Reuters reported that the U.S. and Ukraine plan to sign

the much-debated

minerals deal

, following a meeting between the countries' leaders that

ended in a shouting match last week.

The maturities had initially declined after Trump paused

military aid to the warring country.

HIGHLIGHTS

** Arab states adopt Egyptian alternative to Trump's 'Gaza

Riviera'

** Kenya to buy back about $580 million of 2027 Eurobond

** Ecuador awards 20-year production sharing contract to New

Stratus Energy, Sinopec-linked consortium

Key Latin American stock indexes and currencies:

MSCI Emerging Markets 1095.13 -0.2

MSCI LatAm 1974.09 -0.03

Brazil Bovespa 122799.09

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Mexico IPC 52614.97 1.02

Chile IPSA 7313.89 -0.42

Argentina Merval 2205800.5

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Colombia COLCAP 1568.88 -0.43

Brazil real 5.8852

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Mexico peso 20.7233 -0.18

Chile peso 943.8 0.66

Colombia peso 4151.5 -0.64

Peru sol 3.669 0.43

Argentina peso (interbank) 1064 -

Argentina peso (parallel) 1210

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