EMERGING MARKETS-Latam FX lower, stocks gain as markets navigate new Trump tariffs

By Purvi Agarwal

Feb 10 (Reuters) - Latin American currencies were mixed on Monday as investors assessed the impact of U.S. President Donald Trump's new tariff threats on global trade, while bonds in Ecuador saw sharp losses after an election stalemate.

MSCI's index tracking Latam currencies .MILA00000CUS was off 0.2%, while the stocks gauge .MILA00000PUS was 0.3% higher, after rounding of five consecutive weeks of gains on Friday.

Trump said over the weekend he would announce 25% tariffs on all steel and aluminum imports into the U.S. on Monday, rattling economies that sell steel to the country including Canada, Mexico and Brazil.

This follows last week's saga when Trump initially ordered tariffs on Feb. 1, but gave Mexico and Canada a one-month reprieve after negotiations.

On the day, the Mexican peso MXN= dipped 0.3%, while its stocks .MXX were up 0.2%.

Brazil's real BRL= jumped 0.4%. Stocks on its Bovespa index .BVSP were up 0.8%. Steelmaker Gerdau GGBR4.SA, which has units in the U.S., rose 4% after the tariff news.

Local media reported that the Brazilian government was planning to impose taxes on U.S. tech companies if the steel tariffs go through, but this was later refuted by Finance Minister Fernando Haddad.

With each Trump announcement, markets brace for possible volatility, on concerns over potential retaliatory measures and an increasingly uncertain outlook for emerging market assets.

"As a result of ambiguities and uncertainties regarding the imposition of tariffs on other economies, investors tend to operate more cautiously and with a lower appetite for risk, which can hurt the performance of emerging market currencies," said analysts at StoneX.

Ecuador's government bonds plunged as they resumed trading, with the country now facing two months of uncertainty after its presidential election failed to produce a winner in the first round of voting.

Bond market traders pushed the country's main 2030 XS2214237807=TE, 2035 XS2214238441=TE and 2040 XS2214239175=TE sovereign bonds down between 5.5 and 10 cents on the dollar.

Credit rating agency Moody's warned that the triple-A ratings of top multilateral lenders such as the World Bank would be at risk if the U.S. withdrew support for them.

Potential tariffs on Mexico would have the most significant impact for global automakers, and could cause a recession in the country in 2025.

The currency CLP= and stocks .SPIPSA in Chile, the world's largest copper producer, jumped 0.2% and 0.4% respectively.

Oil exporter Colombia's peso COP= was 0.1% lower while its stocks were up 0.5%. Its Finance Ministry said on Friday that Colombia had met its fiscal rule in 2024 despite its fiscal deficit landing well above target and the government trimming its economic growth forecast.

Highlights:

IMF sees Nicaragua economic growth cooling as pace of remittances fall

Brazil's auto production, sales down in January

Bank of Mexico's governor says inflation fight enters new phase

Key Latin American stock indexes and currencies: