EMERGING MARKETS-Latam FX mixed as markets eye U.S. tariff developments, trade talks

By Pranav Kashyap and Nikhil Sharma

April 29 (Reuters) - Latin American currencies traded in a tight band on Tuesday as investors looked out for any developments around U.S. tariff negotiations, while focus was on key central bank meetings in the region this week.

U.S. President Donald Trump is expected to sign an executive order on Tuesday that will soften the blow of his harsh auto tariffs. The move will provide auto companies that assemble cars in the U.S. with credits for up to 15% of the vehicle's value.

In another sign of easing U.S.-China trade tensions, a Reuters report stated China has lifted the 125% tariff on ethane imports from the United States imposed earlier this month.

An index tracking Latin American currencies .MILA00000CUS rose 0.4%, up for the ninth straight day, on pace for its longest winning streak in about two years.

In Brazil, stocks .BVSP edged up 0.4%, while the real BRL= strengthened by 0.4%. The central bank chief Gabriel Galipolo reaffirmed the bank's guidance of an upcoming rate hike at the May meeting.

Brazilian policymakers began their tightening cycle in September and have lifted rates by 375 basis points to 14.25%, in a bid to rein in higher annual inflation.

"We're in the last stage of the hiking cycle. The market has started to actually allow the Central Bank of Brazil to take a less hawkish stance overall," said Alejandro Cuadrado, global head of FX and LatAm Strategy at BBVA.

"The markets are seeing this as an opportunity to get into Brazil and to get some of the high carry exposure in the BRL (Brazilian real)."

The central government posted a smaller-than-expected March primary budget surplus, yet delivered a strong first-quarter result.

In Mexico, the benchmark index .MXX reversed earlier gains to fall 1.7%, with mining and transport conglomerate Grupo Mexico GMEXICOB.MX losing over 3%. The country's peso MXN= held steady at 19.6 per dollar.

A Reuters poll showed the country's economy likely remained flat in the first three months of 2025, owing to U.S. tariff uncertainties.

Chilean peso CLP= was down 0.2% ahead of its central bank's interest rate decision later in the day, with expectations that the rate will remain steady at 5%.

Conversely, Peruvian stocks .SPBLPGPT were up 0.2%. Data from Peru indicated that its unemployment rate rose to 8.7% for the quarter ending in March, up from 8.4% in the previous period.

Colombia's peso COP= rose 0.6%, with a central bank interest rate decision looming on Wednesday. A Reuters poll suggests the bank will likely keep rates unchanged, as inflation remains above target levels.

Argentina's foreign exchange rates converged to their closest points since 2019 following the recent easing of the country's exchange rate policy and an agreement with the International Monetary Fund.

Elsewhere, the BRICS group of developing nations failed to reach a joint statement after meeting in Rio de Janeiro, though Brazil issued a statement speaking out against trade protectionism.

Key Latin American stock indexes and currencies: