EMERGING MARKETS-Latam currencies slip after US jobs data, tariff uncertainty lingers

By Shashwat Chauhan and Purvi Agarwal

March 7 (Reuters) - Latin American currencies were broadly lower on Friday, a day after a temporary U.S. tariff exemption drove gains, while investors assessed a U.S. job report and closed a choppy week marked by confusion over U.S. trade policy.

MSCI's index tracking Latam currencies .MILA00000CUS was 0.4% lower after two sessions of gains. It was set to log its best week since late January, while the dollar =USD eyed its worst since November 2022.

U.S. job growth picked up in February, while the unemployment rate edged slightly higher, with trader bets indicating at least three rate cuts by December but the first one not until June. Fed Chair Jerome Powell said on Friday the Fed does not need to hurry further decisions.

"Increased chances of Fed cuts mean that...some central banks, depending on their cycle, will have to accelerate easing, and that can be seen as bad for the currencies," said Andres Abadia, chief LatAm economist at Pantheon Macroeconomics.

"It's a complicated situation for central banks because there's a lot of uncertainty. We don't know what will happen with the tariffs, and the inflation and economic activity in the U.S.," he said.

Latam currencies gave back some gains logged on Thursday, after U.S. President Donald Trump suspended tariffs of 25% he had imposed this week on most goods from Canada and Mexico in the latest twist in rapidly changing trade policy.

Mexican officials will meet with U.S. trade officials next week to discuss tariffs on aluminum and steel imports, Mexican Economy Minister Marcelo Ebrard said. The country also expects to boost the number of compliant companies exporting to the U.S. in the coming weeks.

Data showed Mexico's annual inflation met market estimates and remained within the central bank's target range, likely leaving the door open for more interest rate cuts.

The peso MXN= was little changed, and so was the Chilean peso CLP= after data showed consumer prices edged up in February, in line with expectations.

In Brazil, the economy grew 3.4% in 2024, the strongest since the post-pandemic rebound, but slowing momentum in the fourth quarter fueled bets of an earlier end to the rate hike cycle.

The real BRL= was last down 0.5%. Colombia's peso COP= also depreciated 0.5%.

Regional stock indexes were mixed with Mexican stocks .MXX down 0.2%, and Colombian shares .COLCAP up 0.7%. Brazil's Bovespa .BVSP outperformed with a 1.8% gain, buoyed by energy stocks, adding to a 0.6% gain in MSCI's stocks gauge .MILA00000PUS.

EM debt stabilized after being swept up in a global selloff earlier this week, with international bonds of Ukraine, Egypt, Ghana and Senegal - to name a few - all steadying.

JPMorgan lowered its view on EM sovereign debt in dollars, moving its recommendation on sovereign and semi-sovereign dollar debt included in its EMBI Global Diversified index to "underweight" from "market weight."

South Africa's rand ZAR= weakened 0.9% against the dollar after Trump said the United States is stopping all federal funding to South Africa.

HIGHLIGHTS

Colombia considering new spending delay, amount pending, Finance Minister says

Recession risks rise for all three North American economies over US tariff chaos - Reuters poll

Argentina's YPF says 2024 adjusted EBITDA up 15% to $4.65 billion

*US mulls how to ease Russia energy sanctions quickly if war ends, sources say

Key Latin American stock indexes and currencies: