EMERGING MARKETS-Most Latin American stocks, FX set to end holiday-thinned week lower

Updates with afternoon trading prices

By Lisa Pauline Mattackal

Dec 27 (Reuters) - Most Latin American markets were on track to close a holiday-shortened week in the red on Friday, with trading thin after the Christmas holidays as investor focus turned to the outlook for 2025 and a strong dollar weighed on regional currencies.

Brazil's consumer prices rose less than expected in the month to mid-December, data showed, while separate data showed the country's jobless rate hit a fresh record low in the September-November period although job creation slowed.

Brazil's real RL=> slipped 0.1% against the dollar, retracing some of Thursday's gains after the central bank intervened in the forex markets. The real has slumped over 20% against the dollar this year, one of the worst global performers.

More broadly, MSCI's index for Latin American stocks .MILA00000PUS fell 1%, and on track to lose over 2% for the week, its third straight weekly loss.

A gauge for currencies .MILA00000CUS lost 0.6%, on track for weekly losses of almost 1.3% as the dollar =USD hovered around two-year highs.

Mexico's peso MXN= shed 0.5%, on track for its first weekly fall against the dollar in five.

Gains in the dollar and rising U.S. Treasury yields are set to cement a turbulent year for emerging market assets after the U.S. Federal Reserve signaled a slowing pace of interest rate cuts next year, and as markets continuing to gauge the possible impact of threatened tariffs from Donald Trump's incoming administration and a slowing global growth picture.

"EM underperformance has broadly been due to weaker global trade and commodity prices and a weaker China, and the Fed is the icing on the cake," said Arthur Budaghyan, chief emerging market strategist at BCA Research.

"The move out of emerging markets will persist into the new year, I would not recommend buying now ...it will be very hard for any EMs to rally in absolute terms."

Latin American markets are set for steep yearly losses - with the regional gauges of currencies and stocks down nearly 11% and over 29%, respectively - lagging broader EM assets.

Elsewhere, the Russian rouble tumbled 5.8% against the dollar after the central bank announced it would withdraw some support for the currency in the first working week of 2025.

Mexican stocks .MXX outperformed, rising 0.2%.

Shares in Brazil's Brava Energia BRAV3.SA soared over 10% after the company revealed talks with banks on a potential asset sale.

Key Latin American stock indexes and currencies:

(Reporting by Lisa Mattackal and Shashwat Chauhan in Bengaluru; Editing by Alistair Bell)

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