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EMERGING MARKETS-Latam stocks, FX ease as vaccine rally loses steam

    * Brazil GDP growth next year could top 4% - economy
    * Mexico's peso set to snap a two-day losing streak 
    * Peru's sol on track to end a two-day winning streak

    By Shriya Ramakrishnan
    Nov 19 (Reuters) - Latin American stocks retreated from
eight-month highs on Thursday and regional currencies traded in
tight ranges, tracking a global pullback in equities as tighter
coronavirus restrictions dented risk sentiment.
    A gauge of Latin American stocks fell 1%
after hitting its highest level since March 9 in the previous
session, while its currencies counterpart
dropped 0.6%.
    Optimism about encouraging vaccine developments provided an
initial boost to risk assets in the region, but the rally ran
out of steam as it did last week, after several countries
announced record infection rates and tougher lockdowns.
    While analysts have said the advent of a COVID-19 vaccine
could spur inflows into riskier Latin American assets,
short-term headwinds remain with regard to uncertainty over the
availability and timeline of vaccine distribution.
    The Brazilian real traded marginally lower, receiving
some support after the country's economy minister said Latin
America's largest economy could surprise on the upside and grow
more than 4% next year.    
    Brazil's central bank said on Wednesday it will intervene in
the foreign exchange market if the market is unable to absorb
the "large" outflow of reais expected by the end of the year as
local banks unwind their so-called overhedge position.

    "Although there are multiple factors pointing to a positive
outlook for Brazil in the short to medium term–including the
stronger-than-expected recovery and preparations for mass
vaccination, the fiscal outlook remains troubling," analysts at
TS Lombard wrote in a note, adding that progress in fiscal
reforms was a sticking point for the government's credibility. 
    Brazilian stocks traded 0.3% higher. 
    Mexico's peso strengthened 0.4% during the day and
was set to snap a two-day losing streak. 
    The currency has fared better than its Latam peers this year
after the country's central bank recently signaled a pause to
its aggressive cycle of interest rate cuts, while Joe Biden's
victory in the U.S. presidential election has also raised hopes
for more stable trade policies.
    Mexico earlier this week completed a debt refinancing
operation worth $6.6 billion in international markets, including
a heavily over-subscribed bond offer.
    Chile's peso edged down, tracking weakness in prices
of copper, while Colombia's peso fell 0.2% as oil prices
dipped after surging COVID-19 cases around the world raised
worries over fuel demand.
    Peru's sol was on track to end a two-day winning
streak, after the appointment of Francisco Sagasti as the Andean
nation's interim president restored some calm in markets. 
    Key Latin American stock indexes and currencies:   
                                Latest     Daily % change
 MSCI Emerging Markets           1195.96              -0.96
 MSCI LatAm                      2167.64              -1.01
 Brazil Bovespa                106420.35               0.28
 Mexico IPC                            -                  -
 Chile IPSA                      4047.91              -1.48
 Argentina MerVal               51342.96              0.092
 Colombia COLCAP                 1234.93               0.03 Currencies              Latest     Daily % change
 Brazil real                      5.3382              -0.06
 Mexico peso                     20.2830               0.39
 Chile peso                        758.7              -0.11
 Colombia peso                   3649.68              -0.22
 Peru sol                         3.5768              -0.20
 Argentina peso (interbank)      80.2600              -0.11

 (Reporting by Shriya Ramakrishnan in Bengaluru; editing by
David Evans)