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EMERGING MARKETS-Latam FX gains as Fed calms tapering fears; set for weekly loss

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* Peruvian sol top weekly performer; Chile's peso top loser * MSCI FX index snap six-week winning streak * Mexican, Chilean, Peruvian c.banks leave rates unchanged (Adds comments, updates prices throughout) By Shashank Nayar and Shreyashi Sanyal May 14 (Reuters) - Most Latin American currencies gained on Friday as the dollar calmed and Treasury yields fell after Federal Reserve officials eased fears about monetary tightening, while the Peruvian sol headed for its best week in two decades. MSCI's index of Latin American currencies gained 0.5% but was set to snap a six-week winning streak, while stocks rose 1.3%, also set to drop for the week. Major emerging market assets came under pressure earlier in the week after data showed U.S. inflation in April gained the most in nearly 12 years, stirring worries about tighter monetary policy. However, inflationary concerns eased after Federal Reserve Governor Christopher Waller said on Thursday the central bank would not raise rates until it sees inflation above target for a long time, or excessively high inflation. "There will be data disappointments along the way as the economy comes off the initial burst of fiscal support," said Mazen Issa, senior FX strategist at TD Securities. "This is not a cause for major concern but as this week's U.S. CPI report suggested, the market sometimes unnecessarily panics even if the factors driving it are known to be transitory," added Issa. The currency of Latin America's largest economy, Brazil , was up 0.8% on a weaker dollar, but falling prices for iron-ore, one of the country's top exports, inflicted weekly losses of nearly 0.5% on the real. The real received support this week after major big international banks raised their forecasts for Brazilian economic growth this year, after economic activity for March suggested the economy expanded in the first quarter. Most other Latin American currencies including the Mexican peso and Chilean peso gained, while the Peruvian sol slipped after each of their respective central banks left benchmark interest rates unchanged to help support economies battered by the coronavirus pandemic. The monetary policy committee of Chile's central bank voted unanimously on Thursday to keep its benchmark interest rate unchanged at 0.5%, while Peru's central bank maintained interest rates at 0.25%. Mexico's peso gained 0.5% and was set to rise for the second consecutive day as oil prices jumped and as the country's central bank hinted at a tightening cycle on the horizon. The peso recorded a third straight week of gains. Colombia's peso gained 1.1%, also supported by the surge in crude prices, and was set to record its best week since the beginning of this year even as social protests rise against a withdrawn government tax bill. The Peruvian sol was poised to be the best performing currency this week, while the currency of the world's top copper producer Chile looked like the top weekly loser as copper prices were on course for their first weekly decline since the start of April, driven by a dip in demand from China. "Both the Peruvian sol and Colombian peso saw a bit of a rebound after falling sharply on the back of political uncertainty in recent weeks," economists at Capital Economics wrote in a client note. The dollar index dropped 0.4% while Treasury yields also slid. Key Latin American stock indexes and currencies: Stock indexes Latest Daily % change MSCI Emerging Markets 1307.43 1.13 MSCI LatAm 2495.80 1.37 Brazil Bovespa 121689.03 0.81 Mexico IPC 49154.51 0.67 Chile IPSA 4556.16 2.53 Argentina MerVal 54686.84 3.916 Colombia COLCAP 1284.54 1.76 Currencies Latest Daily % change Brazil real 5.2656 0.87 Mexico peso 19.8442 0.41 Chile peso 699.8 1.09 Colombia peso 3682.88 0.97 Peru sol 3.6768 -0.52 Argentina peso (interbank) 94.0400 -0.02 Argentina peso (parallel) 150 0.67 (Reporting by Shashank Nayar and Shreyashi Sanyal in Bengaluru Editing by Mark Heinrich)