EMERGING MARKETS-Latam stocks, FX up as dovish Fed comments soothe rate jitters

* IMF lifts Latam, Caribbean 2023 GDP growth estimate to 2.3% * Argentina central bank to weigh rate hike at Thursday meeting * Brazil’s consumer prices to have risen faster in Sept – poll * Latam stocks up 2.8%, FX up 1.6% By Johann M Cherian and Amruta Khandekar Oct 10 (Reuters) – Most Latin American currencies rose against the dollar on Tuesday as dovish remarks by U.S. Federal Reserve officials assuaged some worries about high borrowing costs, though caution remained over the conflict between Israel and the Palestinian militant group Hamas. MSCI’s index tracking Latin American currencies gained 1.6% after top U.S. policymakers indicated rising yields on long-term bonds could steer the central bank from further increases in its main policy rate. The dollar took a breather after having benefited in the previous session from its safe-haven status as the ongoing conflict between Israel and Hamas rattled investors. “Until there is a sense that Hamas-Israel can pull in other actors, it will be seen as just a small regional matter that may not impact global FX values nor aid the dollar in becoming a safe-haven,” said Juan Perez, director of trading at Monex USA. Mexico’s peso and its Colombian peer added 1.0% and 1.9%, respectively, by 1452 GMT. Brazil’s consumer prices likely rose faster in September to bring inflation to its highest rate in seven months, according to a Reuters poll of economists. The real gained 1.2% ahead of the data due on Wednesday. “The forecast acceleration of inflation is expected to have been driven by higher administered prices (gasoline and diesel) higher print in services (driven by airfares and food away from home), and lower deflation in food at home,” analysts at Goldman Sachs wrote in a note. However, the currency of the world’s biggest copper exporter Chile fell 0.3% as worries about lower demand from China due to its ailing property sector weighed on prices of the red metal. Latin American markets are recovering after having recently come under pressure from a rising dollar and Treasury yields on fears of higher-for-longer U.S. interest rates, while local central banks continue monetary easing to avoid hampering growth. Meanwhile, the International Monetary Fund raised its 2023 output growth estimate for Latin America and the Caribbean to 2.3% from July’s 1.9% due to faster expected growth in Brazil and Mexico. However, the fund expects Argentina and Chile among major regional economies, to see a contraction this year. Argentina’s central bank board said it will discuss the possibility of hiking the benchmark interest rate from its current 118% at its meeting later this week. The peso weakened in parallel trade, hitting an all-time low of 1,000 per dollar. Latin American equities were up 2.8%. Key Latin American stock indexes and currencies at 1452 GMT: Stock indexes Latest Daily % change MSCI Emerging Markets 945.17 1.04 MSCI LatAm 2236.95 2.73 Brazil Bovespa 116568.61 1.23 Mexico IPC 49837.20 1.1 Chile IPSA 5753.13 1.63 Argentina MerVal 674126.84 3.931 Colombia COLCAP 1114.26 -0.36 Currencies Latest Daily % change Brazil real 5.0770 1.02 Mexico peso 18.0473 0.78 Chile peso 926.9 -0.37 Colombia peso 4238.66 1.77 Peru sol 3.8169 0.85 Argentina peso 350.0000 0.03 (interbank) Argentina peso 1020 -7.35 (parallel) (Reporting by Johann M Cherian and Amruta Khandekar in Bengaluru; Editing by Emelia Sithole-Matarise)