EMERGING MARKETS-Latam FX set for best six-month gain since 2009 as US economic concerns mount

By Purvi Agarwal

June 30 (Reuters) - Most Latin American currencies were lower on Monday, as the dollar inched higher, while regional equity indexes were mixed as investors awaited progress on trade talks with the U.S. ahead of the July tariff deadline.

MSCI's index tracking Latin American currencies .MILA00000CUS was up 0.4%. The index has gained nearly 18% in the six months of 2025, its most since 2009.

The dollar index =USD, though higher on the day, traded around multi-year lows as investors expected a dovish tilt from the Federal Reserve and increasing chances that President Donald Trump's tax cut bill - which is expected to add to the already high U.S. fiscal debt - will be signed into law.

Investors are also awaiting any trade deals out of the U.S., as a July deadline for tariffs looms, and as Canada and the U.S. were set to resume briefly stalled trade talks.

Ashmore analysts highlight that most Latam countries, with the exception of Mexico, got the lowest level of Trump's so-called "reciprocal" tariffs, making them a relative tariff winner compared with Asia.

Most Latam currencies were lower on the day, with the Colombian peso COP= leading losses, down 0.8%, a day after the central bank held interest rates at 9.25%.

Mexico's peso MXN= slipped 0.3%, though it was on track to register a sixth month of gains, its longest winning streak since 2023.

Brazil's real BRL= was 0.4% higher. Chile's peso CLP= outperformed peers with a 0.7% gain. It eyed six months of gains, its longest gaining streak since 2009.

Both currencies were on track for their best six-month performance since 2016.

Chileans overwhelmingly elected Jeannette Jara, the country's former labor minister, on Sunday to be the incumbent government's candidate and face off against a field of right-wing contenders in November's presidential elections.

Emerging market assets have had a good year so far, as investors looked to move out of U.S. assets due to uncertainty driven by Trump's tariffs and concerns over the United States' mounting fiscal debt.

"Investors have been reassessing their positions given the positive skew in the risk/reward ratio of Latam equities which trade at depressed levels, despite relatively resilient economic fundamentals and potential political turnaround ahead," said analysts at Ashmore.

"Latam remains undervalued, under-owned and well positioned for potential further upside."

MSCI's stocks gauge .MILA00000PUS jumped 0.9%, eyeing its best six-month showing since 2009.

Regional stocks were mixed, with those in Colombia .COLCAP down 0.6%. Heavyweight Brazilian stocks .BVSP gained 0.7%, on track for their fourth month of gains.

Elsewhere in EMs, Taiwan's dollar TWD=TP fell 2.5% against the greenback, to its lowest level since early June, with bank traders pointing to an aggressive intervention by the central bank to sell the Taiwan dollar at the end of the second quarter.

Key Latin American stock indexes and currencies: