EMERGING MARKETS-Latam FX climbs as dollar reverses; South Africa stocks at record high

By Pranav Kashyap

May 29 (Reuters) - Latin American currencies broadly firmed as the U.S. dollar relinquished its earlier upward momentum, while the South African benchmark stock index was trading at record highs.

An index tracking Latin American currencies .MILA00000CUS was up 0.5%, reflecting a pullback in the U.S. dollar.

The dollar =USD reversed its initial advance and was last seen trading 0.5% lower against a basket of key counterparts.

The dollar's fleeting strength had been spurred by a U.S. trade court ruling that invalidated most of President Trump's tariffs, deeming he had overstepped his executive authority with the across-the-board import duties.

But the market's focus swiftly pivoted back to the persistent uncertainties surrounding the U.S. trade and fiscal outlook.

"While the knee-jerk reaction was positive, at the end of the day it actually builds on the uncertainty there is surrounding U.S. trade tariffs," commented Fiona Cincotta, senior market analyst at City Index.

"There is a potential to see ongoing support for EM currencies, but if we do see rising concerns over the U.S. fiscal position, that could hit risk sentiment."

Meanwhile, South Africa's benchmark stock index .JTOPI hit a record high, following the central bank's move to cut interest rates by 25 basis points to 7.25%, a decision underpinned by domestic inflation running comfortably below the midpoint of its target range.

The rand ZAR= was up 0.6%, hovering near its highest levels since December.

In Latin America, the Mexican peso MXN= advanced 0.17% against the dollar, positioning it for its longest monthly winning streak in nearly two years. This comes as the country approaches its first-ever judicial elections this Sunday, where voters will select federal judges and magistrates, including all Supreme Court justice positions.

However, injecting a note of caution, the Bank of Mexico, in its quarterly report published Wednesday, revised down its growth forecasts for the Mexican economy for this year and next, citing subdued domestic activity and uncertainty tied to U.S. trade policy.

Brazil's real BRL= strengthened 0.49%, while Sao Paulo's Bovespa index .BVSP slipped 0.37%.

Brazilian bank lending data for April showed an acceleration despite tight borrowing costs, highlighting resilience in economic activity even as the country maintains interest rates at a near two-decade high after an aggressive monetary tightening cycle.

Argentina's government announced a successful placement of approximately 1.15 trillion pesos (nearly $1 billion) in a fixed-rate Treasury bond maturing in 2030.

The offering, designed to attract international investors with U.S. dollar subscriptions and peso-denominated payments, was heavily oversubscribed with offers reaching 1.94 trillion pesos, as officials look to shore up foreign reserves.

Still, Argentina's peso ARS= slipped 0.43%, while stocks in Buenos Aires .MERV ticked 0.2% lower.

Chile's peso CLP= appreciated 0.36%, though equities in Santiago .SPIPSA fell 0.51%.

On the data front, the unemployment rate for the quarter through April edged up to 8.8%, slightly higher than the previous rolling quarter and above market estimates.

Separately, the Russian rouble RUB= rose strongly on Thursday, surging past the 78 mark against the dollar to reach a two-year high, reportedly following Moscow's proposal for a fresh round of peace talks with Kyiv.

Elsewhere, the International Monetary Fund announced that its staff and Ukrainian authorities have reached a staff-level agreement on the eighth review of Ukraine's four-year, $15.5 billion Extended Fund Facility arrangement.