EMERGING MARKETS-Latam assets rise tracking higher commodity prices; focus on Trump's Fed critique

By Pranav Kashyap and Johann M Cherian

April 22 (Reuters) - Currencies and stocks of most resources-rich Latin American economies rose on Tuesday, tracking higher commodity prices, while investors took stock of an ongoing trade war and U.S. President Donald Trump's recent criticism of the U.S. Federal Reserve.

MSCI's index for Latin American currencies .MILA00000CUS climbed by 0.7%, against the U.S. dollar =USD, which at one point earlier in the session, touched its lowest level in over three years. Similarly, the region's stock index .MILA00000PUS saw a 1.6% gain.

A rise in oil prices provided a boost to Mexico's peso MXN= which rose by 0.6% to touch 19.6 against the dollar.

Investors kept an eye around developments on a water treaty between Mexico and the U.S., alongside negotiations about export of agricultural produce to the United States.

On the backdrop of a weakening global dollar, Chile's peso CLP= gained 0.9% and Peru's sol PEN= ticked up 0.1%, tracking higher copper prices.

Trump ramped up his criticism of Fed chief Jerome Powell on Monday, branding him a "major loser" and issuing a stark ultimatum to lower interest rates "NOW" to prevent an impending economic slowdown.

This rhetoric has further unsettled investor confidence, already on edge due to Trump's unpredictable policy maneuvers and fluctuating announcements regarding U.S. tariffs, which traders fear could wreak havoc on global trade.

The Fed's pivotal role in steering global monetary policy and reinforcing faith in U.S. assets is now under scrutiny, as concerns about its independence add a dramatic twist to the ongoing trade war saga initiated by Trump.

"The Latam currencies continue to benefit, from the continue global repositioning away from the dollar," Andres Abadia, chief Latam economist at Pantheon Macroeconomics said.

"The Mexican peso has rebounded strongly and is one of the best performing in the region mainly due to the upbeat sentiment in terms of the trade relationship with the relationship with the U.S., which can perhaps give the Mexican economy a boost."

The Mexican peso has gained about 6% this year, while the country's stocks .MXX gained 9%. In the session it rose 1%.

Worries about a global recession continued to be a concern on investors' mind. The International Monetary Fund now anticipates emerging market and developing economies to grow 3.7% this year, shaving off about half a percentage point on its previous estimates issued in January.

The institution expects a contraction of 0.3% for Mexico's economy, a stark reversal from a prior forecast of 1.4% growth, as U.S. tariffs begin to weigh heavily on exports.

Brazil, the largest economy in the region, is projected to slow to a 2.0% growth rate, down from an earlier estimate of 2.2%. The real BRL= firmed nearly 1%, while its benchmark stock index .BVSP rose 0.4%.

Brazil's central bank is trying to assess whether interest rates are restrictive enough to curb inflation given the strength of economic activity, governor Gabriel Galipolo said on Tuesday.

Argentina's growth outlook for 2025 has been revised upwards to 5.5% from January's 5% prediction.

The Argentine peso ARS=RASL also edged up by 0.7%, despite being freed from longstanding currency controls aimed at preventing its devaluation, alleviating fears of a resurgence of Argentina's inflation woes.