EMERGING MARKETS-LatAm assets mixed as markets eye rate decisions in Brazil, US this week

By Medha Singh

May 5 (Reuters) - Moves in Latin American assets were muted against a tepid dollar on Monday as investors awaited more details on U.S. trade policies, while bracing for central bank decisions in the United States and Brazil later this week.

Taiwan's dollar TWD=TP made outsized moves in emerging markets, as the usually quiet Asian currency closed up 5.8% in an unprecedented two-day run, the latest sign of a scramble out of the U.S. dollar.

MSCI's index for Latin American currencies .MILA00000CUS hovered near 11-month highs, while the MSCI index for Latin American stocks .MILA00000PUS remained not far from its seven-month peak hit last week.

Despite a market-rattling trade war, assets in the region have benefited from a slide in the dollar and relatively lower U.S. import tariffs for its products.

Brazil's real BRL= was little changed ahead of the central bank's policy decision on Wednesday, where markets expect a continuation of the current tightening cycle with a 50 basis point rate hike.

Private economists polled by Brazil's central bank expect monetary easing to start at the end of 2025, in contrast to most major economies which are in an easing cycle.

"While the hike is widely expected, attention will be focused on forward guidance, as adverse external conditions start to impact domestic activity prospects," said Cassiana Fernandez, head of Latin America Economic Research at J.P. Morgan.

"Last week's actions by both Chile's CBC and Colombia's BanRep demonstrate how the adverse external scenario is already influencing policy decisions and communication."

Last Wednesday, Colombia's central bank cut rates in a surprise move, while Chile's central bank held its benchmark rates steady with both urging caution in the face of global economic uncertainty.

Colombia's peso COP= eased 0.6% ahead of the release of minutes from the central bank's meeting last week.

Chile's peso CLP= was up 0.8% and Peru's sol PEN= gained 0.4%.

This week attention will also be on the U.S. Federal Reserve which is widely expected to stand pat on rates.

Mexico's peso MXN= ticked up as President Claudia Sheinbaum said at a press conference that Mexican officials are set to lay out measures to strengthen the nation's economy.

The Argentine peso ARS=RASL was last trading at 1,177 per dollar, languishing near its recent lows after last month being unleashed from years-long currency controls designed to stop its falling.

Stock markets in Brazil .BVSP slid 0.9% with heavyweight state-run oil firm Petrobras PETR4.SA shedding 2%. Stock markets in Buenos Aires .MERV and Bogota .COLCAP fell 2.4% and 0.1%, respectively, while that in Mexico City .MXX firmed 0.3%.

Currencies elsewhere in emerging markets were stronger. The South African rand ZAR=D3 scaled its highest levels in five weeks after state utility Eskom said it was optimistic about the power outlook over the southern hemisphere winter.

The Russian rouble RUB= strengthened against the U.S. dollar and Chinese yuan, despite falling oil prices and threats of more Western sanctions.