EMERGING MARKETS-Peru's sol, stocks welcome moderate FinMin appointment; other Latam FX rally

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* Peru sol, stocks stabilize after Francke's appointment * Brazil cenbank seen hiking interest rates by 100 bps on Thursday By Susan Mathew Aug 2 (Reuters) - The sol attempted to recover on Monday from a dive to all-time lows after moderate economist Pedro Francke was named finance minister, while Brazil's real led a rally in other Latin American currencies on hopes of a sharp hike in interest rates. The real jumped 1.4%, on course to recover Friday's steep losses, as the dollar dwindled ahead of U.S. jobless claims and nonfarm payrolls data later this week for more insights on the labor market. The greenback extended losses from last week when the U.S. Federal Reserve held its dovish stance. This bodes well for emerging markets, several of which have already turned hawkish to stave off inflation, as it raises interest rate differentials and carry trade appeal for currencies. On Thursday, Brazil's central bank is seen hiking rates by 100 basis points, its largest increase in 18 years, a Reuters poll showed. That would be a fourth hike in a row to 5.25%. The central bank has said it sees the rate ending the year at 7%. A hawkish central bank has helped the real retrace losses this year due to political tensions and worries about a hit to economic growth from the coronavirus pandemic. Crude exporter Colombia's peso rose 0.5% on Monday after the central bank held rates but raised its growth forecast on Friday, while Mexico's peso hovered near four-week highs - both looking past a fall in oil prices. But given the rise in COVID-19 cases, there may be uncertainty as to whether the central bank will act decisively, warned Commerzbank analyst Elisabeth Andrae. PERUVIAN ROLLER COASTER The sol was flat after having tanked 3.4% on Friday when President Pedro Castillo appointed Guido Bellido, a member of his Marxist party, as prime minister. Stocks recovered 2% of Friday's near 6% plunge, but sovereign dollar bonds fell. While Francke's appointment is a positive development as he has held a more moderate view, the possibility of the Cabinet not passing a mandatory confidence vote within 30 days exists, said strategists at Citi. Citi notes Francke's support for current central bank chief Julio Velarde, whose confirmation would bring further support for the currency and rates. But "uncertainty is still high, frictions between Congress and Castillo are likely to continue, and we think this could weigh on assets." The sol is down 11% this year, on par with Turkey's lira in being the worst performing emerging market currencies this year. Eyes are also on a "new deal" with Peru's all-important mining sector. Key Latin American stock indexes and currencies: Stock indexes Latest Daily % change MSCI Emerging Markets 1294.44 1.3 MSCI LatAm 2552.85 1.73 Brazil Bovespa 124244.19 2.01 Mexico IPC 51139.58 0.53 Chile IPSA 4267.72 0.37 Argentina MerVal - - Colombia COLCAP 1243.46 0.54 Currencies Latest Daily % change Brazil real 5.1383 1.35 Mexico peso 19.8029 0.26 Chile peso 756.4 0.54 Colombia peso 3854.32 0.51 Peru sol 4.035 0.82 Argentina peso 96.7700 -0.07 (interbank) (Reporting by Susan Mathew in Bengaluru; editing by Jonathan Oatis)

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