EMERGING MARKETS-Latam currencies on track to end week on strong note

By Nikhil Sharma

June 6 (Reuters) - Latin American currencies were headed for strong weekly gains on Friday, after strong U.S. jobs data eased concerns about the world's largest economy despite brewing global trade tensions.

MSCI's index for Latin American currencies .MILA00000CUS was up more than 2% for the week, the biggest such gain since April 21.

However, the dollar =USD was on track for a weekly loss, down 0.3% so far, on signs of U.S. economic weakness, and fiscal and tariff concerns.

"For the first half of this year, everybody has been wondering when trade is going to be consistent once again. But it seems like there's no clear answer," said Juan Perez, director of trading at Monex.

"Ultimately, that's leading to what we're calling the process of de-dollarization."

Russia was also in focus as its central bank delivered a surprise interest rate cut for the first time since September 2022, citing a cooling economy and slowing inflation.

The rouble RUB= fell 2.6% against the dollar on Friday, but has risen by 32% in 2025 so far, helping Russia's central bank fight inflation by making imported goods cheaper.

Global trade tensions grew after U.S. President Donald Trump doubled steel and aluminum levies, which are a point of concern for Latin American economies such as Mexico with strong industrial ties with the United States.

However, nerves were calmed by news of a U.S.-China trade meeting sometime next week.

Mexico's peso MXN= was up 1.3% for the week, primarily driven by rising oil prices. For the day, the currency was little changed.

Brazil's real BRL= was muted against the dollar after data showed producer prices in Brazil fell for the third consecutive month in April.

The real has risen about 2.4% this week, taking its yearly gains to about 9.6% - the best among its Latam peers - as the higher-yielding currency attracted investors.

"If the U.S. is going to be in a situation where there's not going to be a lot of reliability going forward, then you're going to have to go find yield where you can," Monex's Perez added.

In a major relief for investors, the Brazilian government is expected to back a bill proposing a 10% cut to federal tax breaks, which could allow it to scrap last month's controversial tax hike on financial transactions (IOF).

A broader gauge of the Latin American equities .MILA00000PUS was up 1.5% this week.

In Chile, the peso CLP= fell 0.3%. Fresh data revealed annual inflation above the central bank's target, boosting hopes that the central bank will keep rates unchanged later this month.

The currency and local stock index .SPIPSA were headed for weekly gains.

Key Latin American stock indexes and currencies: