EMERGING MARKETS-Latam FX slips on rising COVID cases, Chilean peso lifted by copper

    * Mexico marks highest daily infection rate since Jan
    * Copper prices rise on earnings optimism

    By Ambar Warrick
    July 22 (Reuters) - Most Latin American currencies fell on
Thursday as rising COVID-19 cases in Brazil and Mexico spurred
caution, while Chile's peso tracked mild gains in copper prices.
    Mexico's peso fell 0.1%. A rise in consumer prices
through the first half of July did little to spur speculation
over another interest rate hike by the central bank, with
COVID-19 cases rising at an exponential rate in the country.

    "With the policy rate already at 4.25%, still significant
slack in the economy, a severe credit crunch, and relatively
well anchored peso, there is likely no need at this juncture to
push the policy rate much higher, as long as the FOMC maintains
a highly accommodative stance and dovish guidance," Goldman
Sachs analysts wrote in a note.
    Mexico on Wednesday posted its biggest jump in COVID-19
cases since early-January.
    Brazil's real shed 0.2%, as infections rose by more
than 54,000 on Wednesday. More infections are likely to cause
renewed lockdown measures, and further hamper growth in Latam's
largest economy.
    Chile's peso led early gains, rising 0.4% as copper
prices rose on optimism over a strong second-quarter earnings
    Optimism over corporate earnings also helped investors look
past recent concerns over economic growth, with broader emerging
markets staging a strong recovery.
    Safe haven such as the dollar and the Japanese yen
 also came off peaks hit this week, while the European
Central Bank vowed to keep policy dovish for even longer to
shore up economic growth.
    But Latin American (Latam) assets lagged their peers due to
rising COVID-19 cases in major economies. Currencies of oil
exporting majors Mexico and Colombia also largely ignored
gains in crude prices. 
    The Pan American Health Organization said the Americas is
facing a pandemic of the unvaccinated, as it warned countries
with low inoculation rates are seeing increases in COVID-19 and
repeated a call for vaccine donations.
    Losses in Colombia's peso were somewhat mitigated by ratings
agency Fitch saying the new tax reform bill will help stabilize
the country's strained public finances.
    But the agency said more fiscal action was required to bring
down government debt levels.
    Latam stocks moved little in early trade. 
    Key Latin American stock indexes and currencies:
                              Latest    Daily % change
 MSCI Emerging Markets         1326.45             1.09
 MSCI LatAm                    2531.09             0.64
 Brazil Bovespa              125577.08            -0.28
 Mexico IPC                   50107.53             0.14
 Chile IPSA                    4282.96             0.18
 Argentina MerVal                    -                -
 Colombia COLCAP               1253.98             0.26 Currencies             Latest    Daily % change
 Brazil real                    5.2006            -0.17
 Mexico peso                   20.1550            -0.12
 Chile peso                     749.56             0.35
 Colombia peso                  3858.3            -0.19
 Peru sol                        3.946             0.00
 Argentina peso                96.3900            -0.02

 (Reporting by Ambar Warrick, Editing by William Maclean)

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