EMERGING MARKETS-Latam FX mixed, stocks dip as investors assess trade, economic outlook

By Nikhil Sharma, Johann M Cherian and Purvi Agarwal

May 16 (Reuters) - Latin American currencies were mixed on Friday, with those of industrial metal exporters hit by falling commodity prices, while investors also looked for fresh developments on the trade front as optimism from the U.S.-China trade truce waned.

MSCI's index for regional currencies .MILA00000CUS was down 0.3% as the dollar rebounded. The index is set for its first weekly decline in over a month, while a gauge for regional stocks .MILA00000PUS fell 0.5%.

Currencies of the world's top copper producers Chile CLP= and Peru PEN= dipped 0.7% and 0.2%, respectively, tracking lower prices of the red metal.

Brazil's real BRL= reversed losses to gain 0.3%.

A bird flu outbreak on a poultry farm in the world's largest chicken exporter triggered a country-wide ban from top buyer China and state-wide restrictions from other consumers.

Investors globally were taking a pause after robust gains following a thaw in tense relations between the U.S. and China earlier in the week. However, analysts pressed that uncertainty prevailed and the outlook for the global economy was in question.

"(The move) reflects the ongoing uncertainty related to the U.S.-China trade relations. The initial hype of that optimism of the potential de-escalation of the U.S.-China trade tension was high but people realize they're still there," said Vivian Lin Thurston, portfolio manager at William Blair.

"A lot of moves (in risk assets) are not driven by the fundamentals of companies or countries, but by the sentiment and risk mentality."

A global slowdown could impact commodity prices, which would affect revenue for export-heavy Latam economies.

Mexico's peso MXN= was up 0.1% a day after the country's central bank lowered its benchmark interest rate by 50 basis points to 8.50%.

The policymakers projected further rate cuts of similar magnitude if inflation stays within the bank's target range.

For the week, the local currency was down slightly, but its stock index IPC .MXX was up about 2.8%.

Mining companies such as Brazil's Vale VALE3.SA and Mexico's Grupo Mexico GMEXICOB.MX pared early declines and were marginally lower, tracking weak industrial metal prices.

Shares of top energy companies, such as Argentina's YPF YPFDm.BA, Brazil's Petrobras PETR4.SA and Colombia's Ecopetrol ECO.CN, were flat to marginally lower.

In Turkey, direct talks between representatives from Moscow and Kyiv ended without a ceasefire agreement after a Ukrainian source said Russia presented conditions that went beyond its previous demands.

Separately, Ukraine's chief debt negotiator told investors this week that Kyiv is in no hurry to restructure its GDP-linked debt, three sources told Reuters, effectively preparing them for possible default on a payment due within weeks. Ukraine's GDP warrants XS1303929894=TE were broadly muted.

Elsewhere, Romania's leu EURRON= slipped 0.3% after the domestic central bank stood pat on its benchmark interest rate at 6.50%, ahead of the deciding round of the country's presidential election on Sunday.

On the other hand, dollar bonds maturing in 2053 XS2571924070=TE and 2051 XS2201851685=TE gained over one cent on the dollar each.

Markets braced for a possible victory for hard-right frontrunner George Simion, which could deepen the political crisis, probably hurting the country's efforts to reduce massive budget deficits. The country's assets witnessed sharp declines in the aftermath of Simion's victory in the first round.

Meanwhile, Trump wrapped up his Gulf tour on Friday, signing several multibillion-dollar business deals.