EMERGING MARKETS-Latam FX rise amid Trump's Davos speech, tariff speculation

Updates to mid-session trading

By Purvi Agarwal and Pranav Kashyap

Jan 23 (Reuters) - Most Latin American currencies rose against the dollar on Thursday, as traders parsed through U.S. President Donald Trump's Davos address and sought clues on whether threatened tariffs would materialize.

The Mexican peso MXN= was up 0.88%, touching its strongest level in over one week. The currency has gained about 1.6% so far this week as traders consider the prospect of possible 25% tariffs on exports to the United States starting on Feb 1.

"It’s difficult to know how seriously we should take the 25% tariff threat on Mexico. The 1st of February threat appeared to be an off-hand comment ... there may be room for Mexico to make concessions and avoid the tariff," said Capital Economics' Latin America economics team.

"The muted moves in the peso we've seen so far suggest that tariffs are not fully priced in."

Market participants are closely monitoring any statements reflecting Trump's stance on tariffs and the first 100 days of his administration are expected to be pivotal for markets to gauge how he will deliver on his campaign commitments.

Trump demanded OPEC lower oil prices and the world drop interest rates in a speech broadcast at the World Economic Forum in Davos, Switzerland.

Trump began his term on Monday without immediately enacting the tariffs he had pledged, offering temporary relief to Latin American and other markets.

Additionally, Latam markets have benefited from a softer U.S. dollar =USD, which fell to a two-week low in the previous session and was last down 0.2%.

Meanwhile, investment bank JPMorgan warned that emerging markets could be seeing a dreaded "sudden stop" of capital flows as Trump's 'America First' policies pump up the U.S. economy and suck money away from poorer countries.

Furthermore, 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. It's stock index .MXX rose 0.68%.

Among other regional currencies, the Brazilian real BRL= was up 0.34%, 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 0.9% in light trading.

MSCI's index tracking Latin American currencies .MILA00000CUS was 0.56% higher, on track for its fifth session of gains. The regional stocks gauge .MILA00000PUS was up 0.51%.

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.

Trump said he wanted to meet his Russian counterpart soon to secure an end to the war with Ukraine.

The WTO chief warned that retaliatory trade wars from U.S. tariff threats could devastate global growth, urging states to avoid retaliation.

Key Latin American stock indexes and currencies: