EMERGING MARKETS-Latam FX ticks up as Trump's offensive on Fed Chair knocks dollar lower

By Nikhil Sharma and Shashwat Chauhan

April 21 (Reuters) - Most Latin American currencies inched higher against a globally flailing dollar on Monday, as U.S. President Donald Trump's criticisms towards Federal Reserve Chair Jerome Powell further weakened investor confidence in the U.S. economy.

White House economic adviser Kevin Hassett said on Friday that Trump and his team would evaluate whether firing the Fed Chair was an option, which came a day after Trump said Powell's termination "cannot come fast enough".

This added another layer of uncertainty in global markets amid growing trade tensions between the U.S. and China after Trump instigated a trade war.

MSCI's index for Latin American currencies .MILA00000CUS firmed 0.8%. In contrast, the dollar index =USD hit its lowest in over three years.

"The bigger question and risk is that: is this a loss of confidence in U.S. policy that's translating into a more sustained pressure on the dollar... that does give EM some breathing room," said Conrad Saldanha, senior portfolio manager at Neuberger Berman.

"EM was hamstrung given the excess liquidity in developed markets and I do think they've got a little bit more firepower (now)."

Trump also stated on Monday that the U.S. economy could slow down unless interest rates are lowered immediately.

Mexico's peso MXN= reversed its initial gains, last down 0.1% after hitting a six-month high earlier in the session.

Argentina's official peso ARS=RASL strengthened to around 1,091 pesos, slipping back below the 1,074 per U.S. dollar level seen before capital controls were abruptly lifted at the start of last week.

Brazil's real BRL=, the Mexican and Chilean pesos are some of the top-performing emerging market currencies in 2025, likely benefiting from relatively lower U.S. tariffs compared to others across the world.

Local stocks .MERV slid almost 6%, down for the third straight session. The broader regional stocks gauge .MILA00000PUS jumped 0.8%, albeit in light trading as investors returned from a long weekend break.

Brazilian markets remained closed for the day on account of Easter.

Elsewhere in emerging markets, ratings agency Moody's downgraded Bolivia's credit rating deeper into the junk category, citing weak governance which increases the chances of a sovereign default.

Key Latin American stock indexes and currencies: