EMERGING MARKETS-Mexican peso rises as investors focus on looming tariff deadline

By Shashwat Chauhan

March 3 (Reuters) - The Mexican peso jumped against a softening dollar on Monday, with markets in a wait-and-see mode on whether U.S. President Donald Trump would make good on his threat to impose tariffs on Mexican and Canadian goods imports.

U.S. Commerce Secretary Howard Lutnick stated over the weekend that tariffs on Canada and Mexico - which Trump had announced earlier this year and then delayed for a month - would go into effect on Tuesday, but that Trump would determine whether to stick with the planned 25% level.

Jon Harrison, managing director for emerging markets macro strategy at GlobalData TS Lombard, noted that the announcement is "a shock to those anticipating minimal trade disruption and raises the probability that other threatened tariffs will be implemented as planned."

Lutnick's comments were the first indication from the Trump administration that it may not impose the full threatened 25% tariffs on all goods from Mexico and non-energy imports from Canada.

Mexico's peso MXN= appreciated 0.5% against the dollar, in line with global dollar weakness, while Chile's peso CLP= gained 0.6%, tracking higher copper prices.

The Mexican stocks benchmark .MXX jumped more than 1% in early trading.

Trump's additional 10% tariffs on Chinese goods will also come into effect on March 4, while China is studying relevant countermeasures, state-backed Global Times said on Monday.

Any impact on the Chinese economy remains vital for Latin American countries, which are heavy producers of commodities like oil and copper - of which China is one of the world's biggest consumers.

The annual gathering of China's parliament starts on March 5, with Beijing expected to unveil its key economic goals and policy agenda for this year.

Ukraine's international bonds tumbled on Monday on fallout from the clash on Friday between President Volodymyr Zelenskiy and Trump in Washington.

The 2036 maturity XS2895056526=TE slid about 3 cents on the dollar, last bid at 54.16 cents.

Britain said on Monday there were several possible proposals on the table for a possible Ukraine ceasefire, after France floated a proposal for a month-long initial truce that could pave the way for peace talks.

On the radar later this week are a Mexican inflation reading along with fourth-quarter GDP data out of Brazil.

Global markets will also track U.S. jobs data due on Friday amid growing concerns over the economy's health, with traders ramping up bets of greater monetary policy easing by the Federal Reserve this year.

The dollar index =USD was last down 0.7%, bogged down by a rallying euro.

MSCI's indexes for Latin American stocks .MILA00000PUS climbed 0.4%, while currencies .MILA00000CUS were flat.

Equity markets in Brazil and Argentina were closed for public holidays.

HIGHLIGHTS

China's trade dominance in South America tempers Trump's influence

Mexico has back-up plan in case Trump goes through with tariff threat, president says

Chile's economic activity up 2.5% year-on-year in January

Key Latin American stock indexes and currencies: