EMERGING MARKETS-Latam FX gains amid weak dollar as Trump tariff turmoil clouds outlook

By Pranav Kashyap and Purvi Agarwal

May 29 (Reuters) - Latin American currencies strengthened against a collapsing dollar as investors assessed the developments in U.S. President Donald Trump's tariff saga, while South African stocks gained after a local interest rate cut.

An index tracking Latin American currencies .MILA00000CUS was up 0.6%, as the dollar index =USD fell over 1% against a basket of major global currencies.

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.

However, the U.S. Appeals Court reinstated the President's tariffs during an appeal by the administration, bringing the market's focus to uncertainties surrounding the U.S. trade and fiscal outlook, now that legal hurdles were involved.

"The Court's decision may have increased uncertainty, by forcing Trump to consider other and more legally secure ways to impose new tariffs," said Thierry Wizman, global FX and rates strategist at Macquarie.

"But the ruling can actually speed up the introduction of more rationalized, sector-based tariffs, many of which may now be announced (but not yet imposed) soon."

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 0.7%, hovering near its highest levels since December.

In Latin America, the Mexican peso MXN= advanced 0.4% against the dollar, ahead of its first-ever judicial elections this Sunday.

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 0.5%, the most among peers. Brazilian bank lending data for April showed an acceleration, highlighting resilience in economic activity, despite tight borrowing costs at a near two-decade high.

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=RASL slipped 1.8%, while stocks in Buenos Aires .MERV ticked 1.6% lower.

Chile's unemployment rate for the quarter through April edged up to 8.8%, slightly higher than the previous rolling quarter and above market estimates. Its peso CLP= appreciated 0.5%.

Brazil's Bovespa index .BVSP was little changed, while Chilean stocks .SPIPSA were down 0.5%. Ones in Mexico .MXX were 0.1% higher.

Separately, the Russian rouble RUB= rose strongly on Thursday, to an over two-year high, reportedly following Moscow's proposal for a fresh round of peace talks with Kyiv.

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.

Elsewhere, Israel signed off on the latest U.S. ceasefire proposal for Gaza before it was sent to the Palestinian Hamas group, the White House said.

Key Latin American stocks and currencies around 1920 GMT :