EMERGING MARKETS-LatAm FX, stocks decline after brief commodity-led rally

By Purvi Agarwal and Ragini Mathur

Feb 4 (Reuters) - Most Latin American currencies and equities retreated as investors booked some profits following the previous session's metals-driven rally.

MSCI's LatAm equity gauge .MILA00000PUS fell 3%, tracking toward its steepest single-day decline since last April - just a day after posting its biggest jump since March.

Emerging market assets have been whipsawed by volatility in precious metals and the dollar following U.S. President Donald Trump's nomination of Kevin Warsh to lead the Federal Reserve last week.

After plunging earlier, commodities rebounded on Tuesday, which lifted resource-rich Latin American markets.

"It's a sort of pause, but also we don't see any catalysts right now," said Andres Abadia, chief LatAm economist at Pantheon Macroeconomics.

He noted that Latin American currencies are moving in lockstep with commodity markets, while local factors take a backseat.

A Reuters poll found that LatAm currencies will likely lose momentum with the upcoming Fed chair appointment in May, as hawkish signals could limit room for regional interest rate cuts.

MSCI's currency measure .MILA00000CUS fell 0.6%. Brazil's real BRL= and Chile's peso CLP= declined about 0.2% and 0.5%, respectively.

Chile's central bank minutes released on Wednesday showed policymakers agreed the benchmark rate should converge toward the midpoint of its 3.75%-4.75% neutral range, but held it at 4.5% last month to avoid market turbulence.

Mexico's peso MXN= depreciated the most among peers, down 0.5%, ahead of the country's monetary policy decision on Thursday.

"With the monetary policy stance now - appropriately in our view - within the estimated neutral range, the Board is expected to stress a cautious approach," said BBVA analysts about Banxico.

The neutral rate is the level where policy neither stimulates nor restrains growth.

Colombia's peso COP= gained 0.2%. Investors cheered Tuesday's cordial face-to-face meeting between Trump and Colombian President Gustavo Petro, defying the fears of some analysts and advisers who questioned whether the two would get along.

REGIONAL STOCKS TUMBLE ACROSS THE BOARD

Heavyweight Brazilian stocks .BVSP slipped 2.3%, after gains in the previous two sessions. Financial stocks, which had buoyed the index recently, declined with Bradesco BBDC4.SA down 4.2%.

Chilean stocks .SPIPSA declined 1.6%, while Colombian equities .COLCAP slipped 3.3%, on track for its steepest one-day fall since last April.

Stocks in Mexico .MXX fell 1.4%. The U.S. and Mexico unveiled a 60-day plan to coordinate trade policies on critical minerals, including potential price floors for certain imports.

Elsewhere, Poland's central bank kept interest rates steady at 4%, as expected.

Reuters reported Russia's public deficit could nearly triple the official target by end-2026 as falling Indian oil purchases and growing trade discounts squeeze revenues.

It comes after India signed a trade deal with the U.S. earlier in the week, agreeing to halt Russian oil purchases.

Key Latin American stock indexes and currencies