EMERGING MARKETS-Latam markets higher on easing tariff fears; Mexican peso flat ahead of decision

By Purvi Agarwal

Feb 6 (Reuters) - Most Latin American markets rose on Thursday as investors continued to await more clues on U.S. President Donald Trump's stance on Gaza and a trade war with China.

MSCI's index tracking Latin American currencies .MILA00000CUS was 0.5% higher, while the stocks measure .MILA00000PUS was up 0.7%, trading at its highest level since early December.

Investors were monitoring geopolitical conflicts, for any Trump-caused developments.

Israel's shekel ILS= and dollar bonds in the country and its neighbors were little changed.

Russia's rouble RUB= rallied, while Ukraine's dollar bonds inched up over 1 cent each, on hopes of a conclusion to the conflict after the countries said they were in touch with the U.S. administration.

In Latin America, the Mexican peso MXN= was up 0.1% ahead of a monetary policy decision where the central bank is widely expected to deliver a jumbo 50 basis point rate cut.

"We assess a higher than market pricing probability of a smaller 25bps rate cut given lingering uncertainty and the scar-tissue left by the US announcement of tariffs on Mexico, and subsequent decision to delay (hold) implementation," analysts at Goldman Sachs said.

"Overall, the risk-reward of accelerating the pace of rate cuts at this meeting is not favorable."

An official on Wednesday said that Mexico and the U.S. had agreed to economic dialogue in a week riddled with changing stances on tariffs and volatile moves in exposed economies.

China challenged the duties and Trump's cancellation of a duty-free exemption for low-value packages at the World Trade Organization.

On the day, however, markets looked past risks of a global trade war, and looked for any signs of de-escalating trade tensions between the U.S. and China.

Stocks in Mexico .MXX were up 0.7%, aided by an over 5% boost in Cemex CEMEXCPO.MX after the cement maker posted a net profit in the fourth quarter and rolled out a $350 million savings program.

Higher oil prices also helped boost currencies in Latin America, with the Colombian peso COL= up 0.5%, while its stocks .COLCAP were up 0.3%.

Copper prices hitting multi-week highs lifted the Chilean peso CLP= to a near three month high.

The Brazilian real BRL= was up 0.2%, after snapping a 12-session win streak on Wednesday.

Elsewhere, the Czech central bank resumed its interest rate-cutting cycle, lowering the main two-week repo rate by 25 basis points.

Highlights:

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Key Latin American stock indexes and currencies: