EMERGING MARKETS-LatAm FX inch up as Trump's tariff threats over Greenland weigh on dollar

By Twesha Dikshit and Johann M Cherian

Jan 19 (Reuters) - Currencies of resources-rich Latin America edged higher on Monday as escalating geopolitical tensions after U.S. President Donald Trump threatened fresh levies on Europe sent the dollar lower and drove investors into safe-haven precious metals.

Trump vowed to implement a wave of increasing tariffs from February 1 on some European nations until the U.S. was allowed to buy Greenland. EU leaders said they would retaliate against the measures, decrying the move as blackmail.

MSCI's Latin American equities index .MILA00000PUS was up 0.4%, while a similar gauge for currencies .MILA00000CUS added 0.4%. Both had ended last week higher with currencies trading close to record highs touched last week.

Markets have started the year navigating a challenging geopolitical landscape, with intensifying tensions across Venezuela, Iran and Greenland adding to uncertainty.

LatAm faces its own test later in the year with elections due in Brazil, Peru and Colombia, along with the renegotiation of the USMCA trade agreement.

Meanwhile, top EU officials and the South American bloc Mercosur signed a free trade agreement on Saturday designed to lower tariffs and boost trade between the two regions.

The deal, which has faced criticism and protests from farmers in Europe, must now gain the consent of the European Parliament and be ratified by the legislatures of Mercosur's Argentina, Brazil, Paraguay and Uruguay.

"We believe that Argentina and Uruguay, while currently benefiting from their roles as key food and energy providers in a disruptive global environment, face increasing risks from a potential shift towards a more unilateral international order," Citi analysts said.

Major stock indexes in the region such as that in copper-exporter Peru .MXNUAMPESCPGPE, Brazil .BVSP and Chile .SPISA were little changed. Argentina's benchmark index .MERV fell the most at 0.8%.

Mexico's .MXX edged up 0.2% to near record-highs. A Reuters poll of economists expects the nation's economy to be on a slow track this year amid high uncertainty over the future of the USMCA trade deal with the U.S. and Canada.

Brazil's Finance Minister Fernando Haddad has proposed expanding the central bank's regulatory mandate to allow it to supervise investment funds, following the recent liquidation of lender Banco Master.

Colombia's equities .COLCAP were the only bright spot, adding 1.3% while the peso COP= strengthened 1% against the greenback. The Chilean peso CLP= slipped 0.3%.

Other regional currencies traded in a tight range with U.S. markets closed for a national holiday.

JPMorgan cut its view on emerging market currencies to 'market weight' from 'overweight' saying short-term positioning was "overbought" following a year-long rally.

Investors were also monitoring developments in Venezuela. Swedish investment platform Maha Capital is seeking approval from the United States to acquire an indirect minority stake in a PDVSA-controlled oil firm.

Key Latin American stock indexes and currencies at 1959 GMT: