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
    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
    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
 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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