EMERGING MARKETS-Latam FX soar after US economic worries weigh down dollar

By Ankita Yadav

Aug 1 (Reuters) - Most Latin American currencies gained on Friday as the dollar tumbled after signs of a cooling U.S. labor market complicated the Federal Reserve's policy path, while investors also scrutinized the latest U.S. tariff comments.

U.S. job growth slowed more than expected in July while the prior month's figures were revised sharply lower, data showed, indicating that the labor market could be showing signs of stalling, adding to some hopes of an interest rate cut in September.

"A higher likelihood of lower U.S. rates can make the dollar relatively less attractive and that is a very favorable headwind for Latin American currencies, we are seeing quite a bit of relief" said Pablo Riveroll, fund manager & global head of equities research at Schroders.

The dollar index =USD plummeted 1.1% following the data, boosting most emerging market currencies. The MSCI index tracking Latin America currencies .MILA00000CUS was up 0.6%, set for marginal gains this week.

Colombia's peso COP= strengthened 1.4%, the most among peers. The currency was set for a weekly gain after three weeks of declines.

Chile's currency CLP= followed with a 0.4% gain. Economic activity rose at an annualized 3.1% in June, data showed, missing estimates.

The real in Brazil BRL= was up 1%. Brazil's government expects to announce next week measures of a contingency plan it has been preparing to help businesses to cope with 50% tariffs imposed by the U.S.

U.S. President Donald Trump upped his tariff salvo on Thursday, detailing higher import duty rates of 10% to 41% on dozens of trading partners, now to come into effect on August 7.

"We're partly getting used to these deadlines that can get extended... more relevant are the items that were exempted, there was initially a very aggressive stance against Brazil and now when we saw the details there were lots of key exports exempted," said Riveroll.

Earlier this week, the dollar surged to a 11-week high after a U.S.-European Union trade deal hit the euro, strong U.S. economic data and the Federal Reserve dampening hopes of a September interest rate cut.

Argentina's peso ARS=RASL was up 0.5%. The International Monetary Fund board completed its first review of the $20 billion program with Argentina, approving a disbursement of approximately $2 billion in funds. Stocks .MERV, however, declined 2.2%.

On the flip side, Mexico's peso MXN= was down 0.1%, a day after Trump extended the tariff negotiation deadline by 90 days. The currency was headed for a weekly decline, an outlier among peers.

MSCI's Latam equity gauge .MILA00000PUS was up 0.2%, and headed towards marginal weekly gains.

Equities in the region were broadly lower, with ones in Colombia .COLCAP and Mexico .MXX down 0.7% and 0.8% respectively.

Meanwhile, El Salvador's bond were marginally lower after the ruling party passed a bill to overhaul how elections are run in the Central American nation, opening the door for President Nayib Bukele to serve another term.

Key Latin American stock indexes and currencies: