EMERGING MARKETS-Brazilian real, Peru's sol light up gloomy Latam FX

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* Chile's peso slides 1.3% * Peru's sol jumps 1.6%, Brazilian real up 0.4% (Updates prices) By Ambar Warrick and Susan Mathew Oct 14 (Reuters) - Brazil's real was supported by central bank intervention and upbeat economic data on Thursday, while Peru's sol jumped more than 1% in a winning streak spurred by a more moderate shift in left wing President Pedro Castillo's government. Most other Latin American currencies weakened against the dollar after as U.S. economic data fed bets on early tapering by the Federal Reserve. Chile's peso slumped 1.3%, moving closer towards five-month lows hit earlier this week. The currency reversed strong session gains made after the central bank overnight hiked rates by a more-than-expected 125 basis points to 2.75%, amid rising inflation. "We stick to our view that (Chile's) policy rate will likely peak at 6.00% in 1H22... (but) the evolution of idiosyncratic risks will be key to assess how much tightening will be necessary," strategists at Citi said. "We think politics will remain the driver for the CLP and expect overall weakness into the election." Chile heads to the polls later in November. The opposition on Wednesday launched impeachment proceedings against President Sebastian Pinera after some details in the Pandora Papers leak. Peru's sol hit over 11-week highs, extending gains to a sixth straight session - its longest winning streak since 2019. It has gained about 5.5% over the six days. The streak started after Mirtha Vasquez was appointed as prime minister, replacing far-left Guido Bellido whose brash style had rattled investors. Some other ministers were also replaced with more moderate officials. But the moves did not go down well with his party. The ruling Marxist-leaning party Peru Libre on Thursday said it will withdraw support for the government in the Congress which is dominated by the opposition. The sol is down around 7.6% for year, having slumped since the surprise lead and election win for Castillo. It is about 8% away from 2021 peaks hit in early April. In Brazil, the real rose 0.4%. After selling $1 billion worth of currency swaps in a surprise auction on Wednesday, the bank said it would hold another sale on Thursday, attempting to lift the currency from near six-month lows. Data on Thursday showed Brazil's services activity grew 16.7% in August from last year, indicating some resilience in the economy. Latin America's largest economy and most emerging markets are under threat from heightened inflation, especially with energy prices on the rise. Minutes from the Mexican central bank's previous meeting showed worries about inflation remaining strongly above target, while Argentina's inflation rate spiked back up to a higher-than-expected 3.5% in September after months of declines. Fitch on Thursday affirmed Argentina at 'CCC' in junk grade. Key Latin American stock indexes and currencies: Stock indexes Latest Daily % change MSCI Emerging Markets 1268.28 0.64 MSCI LatAm 2244.78 0.73 Brazil Bovespa 113335.64 -0.11 Mexico IPC 52168.09 0.69 Chile IPSA 3996.48 -0.25 Argentina MerVal 80066.95 2.09 Colombia COLCAP 1414.29 1.44 Currencies Latest Daily % change Brazil real 5.5174 0.36 Mexico peso 20.5540 -0.03 Chile peso 825 -1.14 Colombia peso 3759.5 -0.58 Peru sol 3.918 1.21 Argentina peso 99.1500 -0.02 (interbank) (Reporting by Ambar Warrick; Editing by Giles Elgood and Alistair Bell)

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