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EMERGING MARKETS-Peruvian sol leads Latam FX losses on political upheaval

    * Sol drops up to 1.1%
    * MSCI currencies index down 0.7%
    * Brazil's Embraer falls after Q3 loss

    By Ambar Warrick
    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 retreated from a
bumper rally in the prior session. 
    The sol dropped about 0.9%, 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 peso and Colombia's peso had led
gains on Monday, capitalizing on a surge in oil prices after
news of a breakthrough in a coronavirus vaccine spurred
widespread buying into risk-linked assets.
    Joe Biden's U.S. presidential election win had also fed risk
appetite, on the prospect of calmer U.S. trade policies. 
    For the day, the Mexican and Colombian pesos fell between
0.1% to 0.3%. Chile's peso fell more about 0.6% to the
dollar in early trade, tracking a dip in copper prices as
investors booked profits after a strong rally.
    Monday's rally had shown some signs of slowing late in the
day as questions arose about when and how much of the vaccine
would be available. 
    For the day, the MSCI's index of Latam stocks
 fell 0.4%, while a currencies index
 retreated 0.7%. 
    Emerging market economies also remained under pressure from
the pandemic, as lockdowns due to the virus exacerbated existing
 issues such as inflation and fiscal spending.
    Brazil's real fell 0.3% against the dollar, extending
losses into a second session 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 economic 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:
    
                              Latest       Daily % change
 MSCI Emerging Markets         1187.07                  -0.44
                                        
 MSCI LatAm                    2095.55                  -0.36
                                        
 Brazil Bovespa              104033.86                    0.5
                                        
 Mexico IPC                          -                      -
                                        
 Chile IPSA                    3888.42                  -1.02
                                        
 Argentina MerVal                    -                      -
                                        
 Colombia COLCAP               1213.69                      - Currencies             Latest       Daily % change
 Brazil real                    5.3904                  -0.11
                                        
 Mexico peso                   20.3790                  -0.25
                                        
 Chile peso                        762                  -0.60
                                        
 Colombia peso                 3652.39                  -0.15
 Peru sol                       3.6148                  -0.94
                                        
 Argentina peso                79.4100                  -0.08
 (interbank)                            
                                        
 

 (Reporting by Ambar Warrick in Bengaluru)
  
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