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EMERGING MARKETS-Latam stocks gain on vaccine optimism, FX rally peters out

* Mexican peso at below 20 per dollar for first time since March * Peru preps century bond issue * MSCI Latam stocks index up over 7% in last two weeks (Adds details, updates prices) By Sruthi Shankar and Ambar Warrick Nov 23 (Reuters) - Latin American stocks rose on Monday, while currencies retreated from initial gains as progress towards a coronavirus vaccine bolstered hopes for economic activity to return to pre-pandemic levels. Bourses in Brazil, Chile and Mexico rose between 0.8% to 1.4%, tracking a rally in global equities after AstraZeneca said its COVID-19 vaccine, cheaper to make, easier to distribute and faster to scale-up than its rivals, could be as much as 90% effective. Emerging market assets were cheered by the simpler distribution logistics for the vaccine. Countries such as Brazil and India already have supply and manufacturing contracts in place for the vaccine. Positive vaccine news, coupled with the prospect of easy monetary policy for the duration of the pandemic has greatly benefited equities, with the MSCI's index of regional equities adding more than 7% over the past two weeks. But regional currencies came off initial gains as investors were still uncertain about the timing of a vaccine, while the economic ructions from the pandemic continued to show. A resurgence of infections in Brazil - Latam's largest economy - also dulled risk appetite. The real fell about 1%, while the Chilean peso fell more than 1%, tracking a slight decline in copper prices. Losses in the Mexican peso and the Colombian peso were mitigated by strength in oil markets. The Mexican unit fell slightly after briefly trading below 20 to a dollar for the first time since March. Renewed carry trade interest and relatively higher interest rates have seen the peso outperform most of its emerging market peers this year. "The immediate target is MXN19.80," Marc Chandler, chief market strategist at Bannockburn Global Forex told clients in a note. "The high nominal rates (~4.28% on a one-month bill, or cetes) and the broader gains among emerging market currencies appear to be fueling the peso's gains." Peru's sol edged lower as the country prepared a century bond in dollars after authorizing the issuance of debt of up to $4 billion to help rein in the country's coronavirus outbreak and soften its economic impact. The issuance comes days after newly appointed interim President Francisco Sagasti told Reuters that Peru planned to issue bonds in the near term to service the Andean nation's "very high" fiscal deficit. Argentine markets were closed for a holiday. Key Latin American stock indexes and currencies: Latest Daily % change MSCI Emerging Markets 1218.90 0.8 MSCI LatAm 2164.80 0.1 Brazil Bovespa 107178.68 1.07 Mexico IPC 42357.27 1.08 Chile IPSA 4131.91 1.91 Colombia COLCAP 1246.99 0.58 Currencies Latest Daily % change Brazil real 5.4451 -1.09 Mexico peso 20.1343 -0.18 Chile peso 772.7 -1.14 Colombia peso 3645.55 -0.40 Peru sol 3.604 -0.26 (Reporting by Sruthi Shankar in Bengaluru; editing by Emelia Sithole-Matarise and Tom Brown)