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EMERGING MARKETS-Peruvian sol hits 18-year low on political upheaval, Latam peers up

    * Sol drops on Vizcarra's removal
    * MSCI currencies index down 
    * Brazil's Embraer falls after Q3 loss

 (Updates prices throughout)
    By Ambar Warrick and Shreyashi Sanyal
    Nov 10 (Reuters) - Peru's sol was set for its worst day in
five months on Tuesday after the removal of President Martín
Vizcarra, while other Latin American currencies extended a rally
from the prior session after news of a COVID-19 vaccine
breakthrough. 
    The sol dropped 1.1%, while Peru's dollar-denominated
government bonds tumbled after the country's Congress ousted
Vizcarra over corruption allegations. 
    The move sparked immediate political tensions in the Andean
country, which is already struggling from the economic fallout
of the coronavirus pandemic. 
    Mexico's and Colombia's pesos rose after
having led gains on Monday, capitalizing on a surge in oil
prices after news of U.S. drugmaker Pfizer and its
German partner BioNTech's potential coronavirus
vaccine. 
    "While the tremendous vaccine result is likely to underpin
markets from here, investors shouldn't be too gung-ho with their
portfolio," said Laith Khalaf, financial analyst at AJ Bell.
    "The vaccine result clearly raises hopes that a return to
normality is within touching distance, and while that is
extremely positive for markets and businesses, we should be
mindful that the economic impact of the pandemic is still being
felt around the globe."
    Joe Biden's U.S. presidential election win also fed risk
appetite, on the prospect of calmer U.S. trade policies. 
    Chile's peso firmed 0.2% to the dollar, as copper
prices stayed near 29-month highs.    
    For the day, the MSCI's index of Latam stocks
 rose 0.6%, while a currencies index
 retreated 0.5%. 
    Emerging market economies remained under pressure from the
pandemic, as lockdowns due to the virus exacerbated existing 
issues such as inflation and fiscal spending.
    Brazil's real struggled for direction on Tuesday,
after the  currency unexpectedly pared all of its strong gains
on Monday.
    Analysts were cautious about the real's prospects, even as
Latin America's largest economy slowly recovered from the
pandemic. 
    "Although the Brazilian economy seems to be recovering well,
the low key interest rate level, the lack of clarity regarding
public finances and faltering reform plans against the
background of the corona pandemic are likely to continue to
weigh on the real," Commerzbank analysts wrote in a note.
    Brazilian stocks rose about 0.5%. But planemaker
Embraer SA sank more than 3% after it posted a
third-quarter loss and said it was preparing for a challenging
2021.
    Argentina's peso retreated slightly after the
country's economy minister said it will seek an extended fund
facility from the International Monetary Fund to replace a
failed $57 billion facility.
    The country recently emerged from a sovereign debt
restructuring after countless defaults. 
    
    Key Latin American stock indexes and currencies:
    
        Stock indexes                 Latest   Daily %
                                               change
 MSCI Emerging Markets                1179.54    -1.08
 MSCI LatAm                           2122.19      0.9
 Brazil Bovespa                     105395.20     1.82
 Mexico IPC                          40267.10     1.55
 Chile IPSA                           3977.45     1.25
 Argentina MerVal                    51642.02    4.011
 Colombia COLCAP                      1213.32    -0.03
                                                      
            Currencies                Latest   Daily %
                                               change
 Brazil real                           5.3800     0.08
 Mexico peso                          20.2900     0.19
 Chile peso                             755.7     0.22
 Colombia peso                        3627.75     0.53
 Peru sol                              3.6228    -1.16
 Argentina peso (interbank)           79.4300    -0.10
                                               
 Argentina peso (parallel)                145     4.14
                                               
 
 (Reporting by Ambar Warrick and Shreyashi Sanyal in Bengaluru;
Editing by Tom Brown)
  
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