EMERGING MARKETS-Latam FX tick up as investors await more tariff news

By Purvi Agarwal

Jan 23 (Reuters) - Latin American currencies edged up against the dollar on Thursday with traders expecting more news on the tariff front from U.S. President Donald Trump.

The Mexican peso MXN= was 0.4% stronger against the dollar, touching its highest level in over one week. The currency has gained about 1.6% so far this week as traders digest prospects of 25% tariffs to exports to the United States, which might be coming Feb 1.

Any rhetoric on how the U.S. President plans to keep his campaign pledges on trade will be in focus for financial markets, including Trump's remote address at the World Economic Forum in Davos later on Thursday.

"Tariff policies from the new Trump administration still point to near-term (dollar) strength," analysts at BofA Global Research said.

Official data showed that Mexico's annual inflation rate slowed to its lowest level in almost four years in the first half of January, bolstering bets of continued rate cuts.

"Inflation continues to be well-behaved... the chances of accelerating the pace of rate cuts in the February meeting are increasing further, in our view, also considering the weakening of activity and a dovish communication from (Mexico's) central bank," analysts at Citigroup said in a note.

Among other regional currencies, the Brazilian real BRL= was up 0.4%, poised to extend gains to a fourth consecutive session versus the greenback.

Investors already concerned about Brazil's ballooning public debt load under President Luiz Inacio Lula da Silva are now reckoning with an additional risk of a government debt profile with growing sensitivity to high interest rates.

On a brighter note, an estimate by a consultancy firm showed that Brazil's first-ever auction to add batteries and storage systems to its national power grid later this year could generate $450 million in investments.

The Chilean peso CLP= was up 0.4%, while the Colombian peso COP= gained 0.4% too in light trading.

MSCI's index tracking Latin American currencies .MILA00000CUS was 0.5% higher, on track for its fifth session of gains. The stocks gauge .MILA00000PUS was up 0.2%.

Meanwhile, U.S. Secretary of State Marco Rubio will visit Panama during his first overseas trip in the post, a source told Reuters, as Trump makes a push for the United States to take back the Panama Canal.

Elsewhere in EM, Ukraine's central bank raised its main interest rate by one percentage point to 14.5%, while Turkey's central bank cut its key interest rate by 250 basis points to 45%, as expected.

Key Latin American stock indexes and currencies: