EMERGING MARKETS-Latam markets recover broadly, Colombian peso falls as investors assess tariffs

By Purvi Agarwal and Lisa Pauline Mattackal

Jan 28 (Reuters) - Indexes tracking Latin American currencies and stocks rose on Tuesday, as investors gauged the impact of U.S. President Donald Trump's fresh tariff talks, though Colombia's peso continued to fall after a last minute deal with the U.S.

In his latest speech on tariffs, Trump said he was planning to impose tariffs on imported computer chips and some metal imports, among others.

His Treasury Secretary pick, Scott Bessent, has been pushing for new universal tariffs on U.S. imports to start at 2.5% and gradually rise by the same amount each month, as per a report.

The Mexican peso MXN=, among the most vulnerable to U.S. tariffs, reversed early declines and was last up 0.3% against the greenback, helping a 0.7% gain in MSCI's index tracking Latin American currencies .MILA00000CUS.

It had weakened to its lowest level in almost a week on Monday, after Trump's spat with Colombia dashed hopes of the U.S. taking a softer stance on tariffs.

The Colombian peso COP= fell 0.7%.

"We saw a short-lived spat over Colombia recently, so maybe that's the kind of environment - on and off and more headline risk, rather than longer reaching measures that seem to be what investors so far are anticipating," said James Wilson, EM Sovereign Debt Strategist at ING.

"We haven't really seen people step away (from EM debt)."

MSCI's stocks measure .MILA00000PUS rose 0.3% as Argentina's Merval .MERV was up 1.2% and Colombia's COLCAP .COLCAP jumped 2.3%.

Meanwhile, the Chilean peso CLP= weakened 0.5% ahead of a local interest rate decision, with investors widely expecting the central bank to keep rates on hold.

The currency in the export-heavy economy has been flat so far this year, after falling nearly 13% in 2024, in-line with broader EM currencies pressured by tariff threats, a hawkish tone adopted by the U.S. Federal Reserve and domestic fiscal worries.

Trump's proposed tariffs on copper also weighed. Chile is the world's largest copper producer.

Investors were also on edge ahead of the Fed's next policy decision on Wednesday, followed by Brazil's. Higher U.S. rates typically pressure demand for riskier emerging market assets.

"If we see the Fed going through a shallow rate cut cycle and also pause for a little bit longer ... that's going to be potential for some more softness for emerging markets," said Wilson.

Data showed federal tax revenue in Brazil rose 9.62% in real terms in 2024 to a record 2.65 trillion reais ($448.39 billion). The Brazilian real BRL= was up 0.3% against the dollar.

Elsewhere, Hungary's central bank left its base rate steady at 6.5%, the joint highest in the European Union, amid increased risk of higher inflation.

Highlights:

** Egypt aims to sell $2 bln in international bonds after four-year hiatus

** Argentina lifts tariffs on low-cost EVs and hybrids, cuts some auto taxes

** Brazil government supports Gol-Azul merger to strengthen airline sector

Key Latin American stock indexes and currencies: