EMERGING MARKETS-Latam investors enjoy short respite from Trump's delayed tariffs

Updates to mid-session trading

By Purvi Agarwal and Johann M Cherian

Feb 14 (Reuters) - Indexes tracking Latin American currencies and stocks were set to end the week higher on Friday, as investors cheered on a brief relief when U.S. President Donald Trump did not immediately impose reciprocal tariffs.

Adding to a recent flood of tariff-related headlines, Trump tasked his economics team with devising plans for reciprocal tariffs on every country taxing U.S. imports on Thursday.

Analysts expect this process to leave room for negotiations, as with India, where it agreed to start talks for an early trade deal and resolve their standoff over tariffs, promising to buy more American energy and military equipment.

Mexico and Canada had also come to an agreement with the U.S. on border security earlier this month, after which the U.S. President paused tariffs on the neighbors for a 30-day period.

MSCI's index tracking LatAm currencies .MILA00000CUS was up 1%, trading at its highest level since early October. The index was set for its sixth week of gains, its longest run since between March and May 2021.

"We saw a sell off when it looked like there would actually be tariffs imposed on on Canada, Mexico and China, but now the market is relaxed and they're waiting to see if tariffs will actually be implemented beyond the ones in China," said Rachel Ziemba, founder of Ziemba Insights.

Brazil's real BRL= strengthened 1.1% to touch levels not seen since November 2024. President Luiz Inacio Lula da Silva hinted at a complaint at the World Trade Organization, or to tax U.S. products in a reaction to Trump's steel tariffs,

"It shows that Lula still cares about global multilateral institutions, but in practice it is unlikely to have a meaningful impact. So the bigger reaction will be in a direct retaliation," Ziemba said.

Investors also assessed a report that said Chinese electric carmaker BYD <002594.SZ> acquired mineral rights for two plots of land in a lithium-rich part of Brazil in 2023.

Mexico's peso MXN=, among the most vulnerable to tariff news, firmed 0.6% to touch a three-week high, while Colombia's peso COP= was flat.

Colombia's finance ministry said it will impose a 1% tax on the production of fossil fuels along with a 19% sales tax on online gambling, as the country strives to balance its accounts.

The stocks gauge .MILA00000PUS gained 2.3%, on track for its sixth consecutive week of gains. Brazil's Bovespa .BVSP added 2.3% to touch a two-month high as oil giant Petrobras PETR4.SA soared 2.8%.

Mexican equities .MXX was flat, limited by a 5.9% drop in Walmart's Mexico and Central America unit WALMEX.MX as its fourth-quarter net profit slightly missed estimates.

Colombia's COLCAP .COLCAP and Argentina's Merval .MERV rose 0.9% each.

Key Latin American stock indexes and currencies at 1930 GMT: