EMERGING MARKETS-Latam FX touches 11-month high as investors weigh potential China tariff reprieve

By Pranav Kashyap and Johann M Cherian

April 23 (Reuters) - Latin American assets rose on Wednesday, tracking higher commodity prices as investors were relieved by signs that President Donald Trump could lower growth-denting U.S. tariffs on China.

MSCI's index for Latin American currencies .MILA00000CUS advanced 0.8%, to touch its highest point since late May 2024, while an index tracking regional stocks .MILA00000PUS saw a 2.9% jump, trading at levels not seen in over five months.

Sources told media outlets the White House would look at lowering tariffs on Chinese imports pending talks with Beijing, bolstering risk-taking globally. A Wall Street Journal report suggested duties on the country would drop to between 50% and 65%.

The two largest economies are in a trade war with U.S. levies on Chinese imports standing at 145%, to which Beijing has slapped levies of 125% on imports from the U.S.

Investors have been on edge on the potential repercussions the trade war could have globally and analysts say a consequent drop in commodity prices is likely to weigh on Latin American economies that are dependent on revenue from resource exports.

Traders were also placated as Trump scaled back his criticism of the U.S. Federal Reserve that sets the tone for monetary policy for central banks around the globe.

Currencies of top copper producers Chile CLP= climbed 0.6% to touch a four-week high, while Peru's sol PEN= edged up 0.1% as prices of the red metal hit a three-week high.

Chile's main stock index .SPIPSA gained 1.5% and U.S.-listed shares of copper miner SQM SQM.N added 1.8%. Peruvian equities .SPBLPGPT gained 1.3%.

Brazil's real BRL= found support as prices of iron ore, a top export commodity, hit a three-week high.

Societe Generale analysts said in a note that the real is likely to remain appealing, bolstered by stabilizing cross-asset volatility and an improved global appetite for risk, alongside ongoing U.S. trade negotiations involving Brazil.

Attractive valuations and reduced economic policy uncertainty are expected to further support the currency's allure, they added.

Brazilian Finance Minister Fernando Haddad upheld a 2.5% growth forecast for the nation's economy this year.

Brazil's central bank perceives the recent moderation in economic activity as a testament to the effectiveness of its tight monetary policy, according to monetary policy director Nilton David.

Brazilian assets had taken a hit last year as the central bank raised interest rates to battle inflation pressures fueled by increased government spending.

The local Bovespa index .BVSP added 1.9%, with mining giant Vale VALE3.SA up 2.7%.

JBS SA JBSS3.SA climbed 3.5% as the world's largest meatpacker advanced its U.S.-listing plan.

On the other hand, oil producer Mexico's peso MXN was flat, limited by a drop in crude prices as investors priced in the likelihood of increased supply.

The nation's benchmark index .MXX rose 2.1%. A poll showed annual inflation likely slowed in the first half of April, lifting the chances that the central bank will again cut interest rates in May.

Fellow crude producer Colombia's peso COP= depreciated 0.3%, while its local bourse .COLCAP added 0.7%.

Argentina's peso ARS=RASL dipped 0.2%, reflecting ongoing volatility since the government lifted longstanding currency controls earlier this month.

Investors are closely monitoring trade negotiations with the U.S., especially as discussions with 34 countries are scheduled this week.

Key Latin American stock indexes and currencies at 1456 GMT: