EMERGING MARKETS-Latam stocks, currencies subdued in thin trade ahead of holiday

There will be no Latin America Emerging Markets report on Wednesday, Dec. 25 as most markets will be closed for Christmas.

By Lisa Pauline Mattackal and Shashwat Chauhan

Dec 24 (Reuters) - Latin American currencies and stocks were mixed against the dollar on Tuesday, with higher commodity prices adding some support though trading was thin ahead of the Christmas holiday.

MSCI's index of Latin American currencies .MILA00000CUS and regional stocks .MILA00000PUS were both down 0.2%.

Brazilian markets were closed, while markets in Argentina, Peru and Chile were scheduled to close early. Regional markets will be shut on Dec. 25 for the Christmas holiday.

A more than 1% rise in oil prices LCOc1 and gains in copper helped support the region's commodity-linked currencies.

EM assets have been volatile this month amid rising U.S. Treasury yields and the dollar's =USD rise to two-year highs as investors have dialed back expectations for Federal Reserve interest rate cuts next year.

"The Fed cut interest rates by 25bps but revised up its rate-path projections to suggest that only two quarter-point reductions may be needed in 2025. Back in September, the median dot for 2025 was pointing to four rate cuts," said Charalampos Pissouros, senior market analyst at forex broker XM.

"The world's reserve currency staged a comeback this week as the Fed’s stance on monetary policy is in clear divergence with other major central banks that are turning more dovish."

Both MSCI's Latin American broader stock and currency indexes are set for steep yearly losses - 29.4% and 10.3%, respectively - lagging broader EM assets, as many regional central banks grapple with rising inflation.

The outlook for 2025 is also likely to be challenging with persistently high U.S. rates hitting demand for emerging market assets, pressuring their currencies and increasing inflation, with the threat of broad global tariffs from U.S. President-elect Donald Trump's administration also likely to weigh.

On the day, Mexico's peso MXN= held steady at 20.18 per dollar. Data showed the country's oil and gas output in November fell to its lowest level this year.

Colombia's peso COP= jumped 1% against the dollar, set to snap six straight sessions of declines, while Chile's peso CLP= slipped by 0.1%.

Key Latin American stock indexes and currencies:

(Reporting by Lisa Mattackal and Shashwat Chauhan in Bengaluru; editing by Jason Neely)

((LisaPauline.Mattackal@thomsonreuters.com; Shashwat.Chauhan@thomsonreuters.com))