EMERGING MARKETS-LatAm FX gains ground after US Supreme Court strikes down Trump's tariffs

By Purvi Agarwal and Ragini Mathur

Feb 20 (Reuters) - Most Latin American currencies gained against the dollar on Friday after the U.S. Supreme Court ruled against President Donald Trump's tariffs, while investors also monitored simmering geopolitical tensions.

MSCI's index tracking currencies in the region .MILA00000CUS jumped 0.7%, while the stocks equivalent .MILA00000PUS gained 1.5%.

If the gains hold, both indexes will record their ninth straight week of advances and their longest weekly winning streaks since 2010 and 2017, respectively.

In Friday's ruling, the U.S. top court struck down Trump's sweeping tariffs, holding that he had exceeded his authority by using a law meant for use in national emergencies to impose the duties.

Trump responded by saying he would roll out a 10% global tariff for 150 days to replace some of the struck-down levies.

"The question is, are these tariffs really off the table or does the administration try to rebuild tariffs through other means, through sectoral tariffs or whatever other sort of emergency kind of tariff routes," noted Chris Turner, global head of research at ING.

"The market adjustment may be tentative to start with, to see whether this kind of court ruling sticks."

MEXICAN, BRAZILIAN CURRENCIES RALLY

Currencies in Mexico MXN= and Brazil BRL=, on which Trump had imposed some of the highest tariffs, jumped 0.7% each.

Turner said investors would be wary about repricing the Mexican peso higher, as the free trade agreement between the U.S., Mexico and Canada (USMCA) is due to be renegotiated later this year.

Stocks in Mexico .MXX were up 0.7%, while Brazilian shares .BVSP gained 1%.

Colombia's peso COP= and Chile's peso CLP= bucked the trend, falling 0.4% and 0.03%, respectively. But stocks in both countries rose, with Colombia's benchmark .COLCAP rising 0.5% and Chile's .SPIPSA gaining 0.4%.

Most emerging market assets traded in tight ranges through the week, which was shortened by holidays for Brazil in Latin America and major Asian markets such as mainland China.

Still, data from Morgan Stanley showed overall weekly inflows in EM hard-currency funds stood at $1.5 billion, compared with outflows of $394 million in the previous week.

Hard-currency ETFs recorded inflows of $594 million, versus outflows of $123 million last week.

US-IRAN TENSIONS IN FOCUS

Meanwhile, U.S.-Iran tensions emerged as a key concern for financial markets, with Trump saying on Friday he was considering a limited military strike on Iran.

On Thursday, he had set a 10-to-15-day deadline for Tehran to reach a deal over its nuclear program.

Iran has threatened to retaliate against U.S. bases in the region if attacked.

Barclays analysts said that if Iran were to attack Israel in retaliation for U.S. military action, the impact on Israeli financial markets would likely be short-lived.

But a prolonged conflict with potential destruction, heightened volatility and supply-side constraints could weigh more heavily on Israel, they added.

Elsewhere, Tullow Oil TLW.L announced a broad capital revamp and a series of deals to deepen its presence in West Africa, sending the company's bond USG91237AB6=1M up over 9.4 cents in its biggest single-day jump.

Key Latin American stock indexes and currencies: