EMERGING MARKETS-Argentine markets extend gains amid talks with US on $20 billion swap line

Sept 24 (Reuters) - Argentine assets roared ahead for a third consecutive day on Wednesday after the U.S. floated a $20 billion swap line to support the country's struggling markets, while most other Latin American currencies weakened against a firm dollar.

In a post on X, U.S. Treasury Secretary Scott Bessent disclosed ongoing negotiations for a $20 billion swap line with Argentina's central bank, while also revealing the United States' willingness to purchase secondary or primary government debt.

The remarks followed Argentine President Javier Milei's meeting on Tuesday with U.S. President Donald Trump, who voiced support for the country and added that a financial bailout was not needed.

Additionally, the World Bank pledged to deploy $4 billion in the coming months to back the South American nation's reform agenda.

Argentina's international bonds rallied, with a 2029 note US040114HX11=TE jumping 4.7 cents on the dollar.

INVESTORS 'MORE COMFORTABLE' WITH US SUPPORT

Its peso currency ARS=RASL continued to climb, gaining 0.3% and recovering losses suffered after Milei's legislative setback on September 7, which sparked the selloff and even prompted an intervention last week by the central bank.

"There are several angles to this, but the 20 billion itself is a high number. So people are definitely more comfortable with the U.S. support, and that number is enough for it to be a meaningful circuit-breaker in terms of the kind of vicious spiral that you were seeing," said Thomas Haugaard, portfolio manager of EM debt at Janus Henderson.

Stocks in Buenos Aires .MERV also built on the rally, soaring 3.8% to take their gains over three days to near 12%.

In broader Latin America, the currencies index .MILA00000CUS lost 0.3%, with a stronger U.S. dollar weighing on the regional currencies after Federal Reserve Chair Jerome Powell struck a cautious tone on further policy easing.

The Brazilian real BRL= fell 0.6% against the dollar. Sao Paulo's main stock index .BVSP was largely flat, though at a record level. Fresh data showed a jump in Brazilian consumer confidence to its highest level since the end of last year.

Meanwhile, MSCI's gauge of the region's equities .MILA00000PUS also slipped about 0.2%.

Mexican equities .MXX flattened and the local peso MXN= fell 0.4% after headline inflation accelerated in the first half of September to near the upper limit of the central bank's target.

The data precedes the central bank's interest rate decision due on Thursday. Economists expect a moderate rate cut as the central bank continues its battle against weak economic conditions.

If delivered, that would be the 11th quarter-point reduction since the start of 2024.

The Colombian peso COP= lost 0.5%, while stocks .COLCAP rose 0.65% to surpass a 12-year peak.

Colombia is also gearing up for a rate decision. The central bank is expected to hold rates next week and extend that trend for the rest of the year.

Chile's peso CLP= fell 0.7%, while its main stock index .SPIPSA rose 0.5%. Peruvian stocks .MXNUAMPESCPGPE were a standout, up 2.2% to hit an all-time high.

Elsewhere, the Czech National Bank left interest rates unchanged for the third time in a row and voiced the need for a relatively tight policy amid looming inflation risks.

The currency crown EURCZK= fell 0.3% - eyeing its worst day in more than a month.

Key Latin American stock indexes and currencies: