EMERGING MARKETS-Latam FX eyes best six-month gain since 2009; focus on US trade deals

By Purvi Agarwal and Shashwat Chauhan

June 30 (Reuters) - Most Latin American currencies edged higher on Monday as the dollar weakened, with Brazil's real and the Mexican peso reaching multi-month highs as investors awaited progress in trade negotiations between the U.S. and its trade partners ahead of the July tariff deadline.

MSCI's index tracking Latin American currencies .MILA00000CUS was last up 0.9%. The index has gained nearly 18% in the six months of 2025, its most since 2009.

The dollar index =USD was pinned at its lowest since March 2022 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. are set to resume briefly stalled trade talks.

"Global uncertainty, especially on geopolitical and commercial issues, has been creating a complex and atypical environment for Latin America in 2025," BBVA analysts said in a note.

"This has led to high market volatility, caution from monetary policy, and broader than normal ranges when forecasting economic variables."

Most Latin American currencies swung higher in the face of a globally weaker dollar, with Brazil's real BRL= rising almost 1% to touch its highest level in over eight months.

Financial analysts expect heightened volatility in trading the real as the local central bank is set to publish the end-of-month Ptax rate on Monday. The Ptax rate serves as a reference for settling futures contracts.

Mexico's peso MXN= appreciated 0.3% to touch its highest level since August 2024, on track to register a sixth month of gains, its longest winning streak since 2023.

Chile's peso CLP= also strengthened 0.9%, set for its sixth successive monthly advance, its longest gaining streak since 2009.

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.

Brazil's real and the Mexican peso are some of the top performing emerging market currencies so far this year, likely benefiting from a higher interest rate differential with the U.S. and a less-than-feared hit from Trump's tariffs.

MSCI's stocks gauge .MILA00000PUS also tracked Wall Street higher, on pace for its best six-month showing since 2009.

Shares of Argentina's YPF YPFDm.BA dropped more than 5% after a U.S. judge ordered Argentina to give up its 51% stake in the oil and gas company to partially satisfy a $16.1 billion court judgment.

Markets in Colombia were closed for a public holiday.

Elsewhere in emerging markets, 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.

HIGHLIGHTS

IMF to provide Ukraine with $500 million after review

Ecuador to receive $1 billion foreign investment linked to renewable energy

Key Latin American stock indexes and currencies: