EMERGING MARKETS-Chile's peso falls after referendum; Latam FX hit by strong dollar

       By Shreyashi Sanyal
    Oct 26 (Reuters) - Chile's peso fell on Monday as
uncertainty grew following a landmark vote to replace the
country's constitution with a new charter drafted by its
citizens, while other major Latin American currencies slipped
against a firmer U.S. dollar.
    Millions of Chileans voters gave a ringing endorsement to a
plan to tear up the country's Pinochet-era constitution on
Sunday night after large and violent social protests last year
sparked demand for a new charter.
    The Chilean peso snapped a six-day winning streak to
fall 0.6%, as analysts feared the rewriting of the constitution
may cause the central bank to adopt a more dovish stance in the
medium term.
    "The road ahead is full of uncertainties and rewriting the
constitution will be a complex process," said Nikhil Sanghani,
Latin America economist at Capital Economics.
    Sanghani noted the state looked set to play a bigger role in
the economy, which while reducing savings and income inequality
may help boost aggregate demand, could lead to a misallocation
of resources and weaker fiscal discipline.
    Other currencies in Latin America were hurt by a rise in the
safe-haven dollar after coronavirus cases surged in
Europe and the United States, while investors awaited central
bank decisions from major economies in the region through the
week.
    Brazil's real weakened 0.1%, with focus on a
central bank policy meeting later this week. The bank is widely
expected to keep the Selic rate on hold at a record low 2.00%.
    A central bank survey showed Brazil's 2020 inflation outlook
rose to 3%, the 11th week in a row it has risen as a recent
spike in food prices continues to intensify short-term inflation
pressures.
    The Mexican peso slipped 0.4% as data showed
Mexico's economy grew more slowly than expected in August from
July as a recovery from the coronavirus pandemic lost steam.

    Colombia's peso mirrored a fall in oil prices, while
local investors awaited a central bank policy meeting on Friday.
    A Reuters poll of analysts said Colombia's central bank will
hold the benchmark interest rate steady, ending seven
consecutive months of cuts which took borrowing costs to a
historic low.
    Stocks in Latin America were lower, with Chilean
and Mexican equities leading declines.

    Key Latin American stock indexes and currencies at 1515 GMT:

 Stock                             Latest     Daily % change
   indexes
 MSCI Emerging Markets             1129.77    -0.59

 MSCI LatAm                        1954.70    -0.67

 Brazil Bovespa                    101396.49  0.14
 Mexico IPC                        38367.02   -0.88
 Chile IPSA                        3778.16    -0.78
 Argentina MerVal                  51828.99   -1.302
 Colombia COLCAP                   1165.27    -0.86

 Currencies                        Latest     Daily % change
 Brazil real                       5.6290     -0.04
 Mexico peso                       20.9970    -0.61
 Chile peso                        776.9      -0.55
 Colombia peso                     3813.21    -0.67

 Peru sol                          3.6027     -0.16
 Argentina peso (interbank)        78.2000    -0.09

 Argentina peso (parallel)         190        2.63



 (Reporting by Shreyashi Sanyal in Bengaluru; Editing by
Bernadette Baum)

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