EMERGING MARKETS-Latam FX mixed amid caution ahead of Sino-US trade talks

By Pranav Kashyap and Nikhil Sharma

May 9 (Reuters) - Latin American currencies were mixed on Friday, and were set to end higher in a week marked by rate decisions and economic data, with investors now watching the Sino-U.S. trade talks over the weekend.

MSCI's gauge for Latin American currencies .MILA00000CUS nudged up 0.3% on the day, and was on track for its fourth-straight weekly gain.

U.S. President Donald Trump said an 80% tariff on Chinese goods "seems right", suggesting an alternative to his 145% levies on Chinese goods.

All eyes were now on trade negotiations between the United States and China that could potentially de-escalate the market-rattling trade war between the world's top two economies.

"Talks expected to happen over the weekend are a positive... But until clearer signs are visible, cautiousness from the side of markets will continue to be the base case," said Wilson Ferrarezi, an economist at TS Lombard.

In Brazil, the real BRL= steadied 0.2% against the dollar and was on pace to end the week with modest gains, primarily benefiting from its central bank's move on Wednesday to hike interest rates.

The central bank also left future steps open amid global uncertainties and sticky domestic inflation. On Friday, data showed April's annual inflation rate escalated to 5.53%, well above the central bank's 3% target.

Brazil's rate decision came hours after the U.S. Federal Reserve stood pat on its key benchmark rate.

Meanwhile, the country's stock index .BVSP rose 0.35%, and was set for its fourth weekly gain in a row. A gauge for Latin American stocks .MILA00000PUS was up 1.5% for the week and rose 0.6% on Friday.

Mexico's benchmark stock index .MXX fell 0.7%, the worst performing among the local peers for the day, after it hit a one-year high in the previous session. Mexico's peso MXN= strengthened 0.3%.

The Bank of Mexico will announce its rate decision next week, with the central bank expected to keep cutting rates given the country's annual inflation rate well within its target.

Data revealed a dip in the country's consumer confidence index. The country's finance minister said Mexico's growth projection was biased to the downside.

In Peru, stocks .SPBLPGPT jumped 1% after the central bank cut interest rate in an overnight surprise move after the annual inflation ticked up last month.

Colombia's peso COP= surged 0.8%. A Reuters poll showed the country is forecast to have grown 2.6% in the first quarter of 2025, indicating expanding economic activity despite tight interest rates.

Elsewhere, Romania's leu EURRON= saw its biggest weekly decline since January 2009 as political crisis deepened after hard-right presidential candidate George Simion's victory in a first-round vote on Sunday.

The International Monetary Fund said its executive board approved the first review of its $7 billion program with Pakistan, allowing the country to draw about $1 billion in cash.

Key Latin American stock indexes and currencies: