EMERGING MARKETS-LatAm assets rise with commodities, Fed

* Commodity prices rise for 2nd day, boosting risk appetite

* LatAm up as Fed erases fears of early stimulus withdrawal

* Brazil's real 20 pct above neutral level, says government

By Walter Brandimarte

NEW YORK, Nov 4 (Reuters) - Latin American financial
markets jumped on Wednesday as investors' appetite for yield
was supported by rising commodity prices and the U.S. Federal
Reserve's renewed commitment to keep interest rates near zero
percent for an "extended period."

Stocks rallied for the second consecutive day after higher
oil and metal prices improved the economic outlook for
commodity-exporting countries in Latin America.

The Fed's pledge to keep loose monetary conditions for a
long time, although widely expected by analysts, provided
additional comfort to investors who feared an early stimulus
withdrawal could derail an incipient global economic recovery.

The U.S. central bank closed out a two-day meeting with an
unanimous decision to keep benchmark overnight interest rates
in a range of zero to 0.25 percent, while expressing concern
that the economic recovery is likely to be muted.

"We consider that the Fed is much more likely to err on the
side of overshooting on inflation than cutting this recovery
short with premature interest rate hikes," Kathryn Rooney,
senior emerging market strategist with Bulltick Capital
Markets, said in a research note.

The MSCI stock index for Latin America .MILA00000PUS
gained 2.94 percent, also supported by stronger-than-expected
quarterly earnings of steelmaker CSN (CSNA3.SA: Quote, Profile, Research), whose shares
climbed 3.07 percent. [ID:nN04503450]

Mexico's IPC stock index .MXX rose 1.88 percent while
Colombia's IGBD .IGBC ended 2.17 percent higher.

Latin American currencies also gained as lower U.S. rates
are likely to keep the dollar weak for a long time.

The Brazilian real (BRBY: Quote, Profile, Research) firmed 0.75 percent to 1.733 per
U.S. dollar, close to its levels before the government imposed
a 2 percent financial tax on foreign inflows last month aimed
at curbing further appreciation.

Fueling fears that the government might be preparing
further measures in the foreign exchange market, Secretary of
Economic Policy Nelson Barbosa said in New York the currency is
currently trading some 20 percent above a "neutral level" that
would neither stimulate nor hinder economic growth.
[ID:nN0424883]

The Colombian peso COP=STFX soared 1.4 percent to
1,961.00 per dollar while the Chilean peso CLP=CL
strengthened 0.62 percent to 528.00 per greenback.

The Mexican peso MXN=, on the other hand, lost 0.3
percent to 13.3 per U.S. dollar on worries of a possible
downgrade of the country's sovereign ratings after Congress
passed a watered-down fiscal reform aimed at reducing the
country's dependence on waning oil revenues.
(Editing by Leslie Adler)