EMERGING MARKETS-Most Latin American currencies tick higher with tariff deadline in sight

By Shashwat Chauhan

March 24 (Reuters) - Most Latin American currencies advanced against the dollar on Monday, kicking-off the week on a brighter note as investors looked for developments on the tariff front with the deadline for U.S. reciprocal tariffs approaching.

Ahead of the April 2 deadline for U.S. reciprocal tariffs, two media reports stated that U.S. President Donald Trump's administration is likely to exclude a set of sector-specific tariffs.

"Trump tariff uncertainty will remain going into the April 2nd deadline. We are less worried about tariffs than the market, though would wait for more clarity on the tariff front," Jefferies analysts said in a note.

In Mexico, the peso MXN= - which had come under immense volatility at the start of the year amid the tariff uncertainty - advanced 0.5% against the dollar.

There were some local developments to assess as well, with fresh data showing Mexico's early March inflation came in slightly below market forecasts, while January economic activity figures pointed to a slow down, likely keeping the Mexican central bank on a policy easing trajectory.

"Annual inflation should continue to trend downwards, allowing Banxico to cut 50bp," Barclays analysts said.

The Bank of Mexico will likely cut its benchmark interest rate by 50 basis points at its meeting on March 27, taking it down to 9%.

Currencies of copper producing nations in the region also got a boost as prices of the red metal appreciated, with top copper producer Chile's peso CLP= advancing 0.2%.

Chile's central bank raised its estimate for 2025 GDP growth to 1.75%-2.75%, up from a previous forecast of 1.50%-2.50%

Lagging the broadly rally was Brazil's real BRL=, down 0.1% against the greenback, on pace for its third straight day of declines.

Brazil's Finance Minister Fernando Haddad said that the government is sticking to next year's primary surplus target even though it will be a challenge, as it prepares to submit its 2026 fiscal goal proposal to Congress.

Most EM currencies have gained ground against the greenback in 2025, as the case of U.S. exceptionalism weakened amid the tariff uncertainty, while fears of an impending economic slowdown also spurred dollar weakness.

Brazil's real remains amongst the best performing EM currency against the dollar so far this year, advancing more than 7%.

MSCI's index for Latin American stocks .MILA00000PUS dipped 0.1%, as a 0.1% fall in heavyweight Brazil .BVSP kept the index under pressure.

Meanwhile, Bloomberg News reported late on Friday that the International Monetary Fund (IMF) will discuss a new $20 billion loan for Argentina during an informal meeting this week.

Argentina equity markets were closed for a public holiday on Monday.

President Trump also said that any country that buys oil or gas from Venezuela will pay a 25 percent tariff on trades made with the United States.

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Key Latin American stock indexes and currencies: