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EMERGING MARKETS-Softer dollar lifts Latam FX; S.African rand weighs on EM

      Chile's economic activity index down 1.2% in October

      Brazil's economy grows less than expected in Q3

      Latam stocks up 0.2%, currencies add 1.2%

 (Updates prices)
    By Bansari Mayur Kamdar
       Dec 1 (Reuters) - Most Latin American currencies rose on
Thursday, aided by weakness in the dollar, while a drop in the
South African rand amid rising political uncertainty weighed on
broader emerging markets.
    Currencies in Latin America rose 1.2%,
outpacing the broader emerging market currencies index
, which added 0.8%.
    The U.S. dollar index tumbled 1% after comments by
Federal Reserve Chair Jerome Powell that U.S. rate hikes could
be scaled back "as soon as December" and as an indicator tracked
by the Fed showed inflation moderating.
    South Africa's rand dropped 2.3% against the dollar,
weighing on the EM index.
    South African President Cyril Ramaphosa's future hung in the
balance as his office said he was exploring options after a
report found evidence he may have committed misconduct over a
stash of cash stolen from his game farm.
        "From a markets perspective, we believe that an early
departure of President Ramaphosa will be perceived negatively by
financial markets, given uncertainties about policy continuity
that such an event would naturally bring," Barclays Bank
strategists wrote in a note.
    "Hence, against the uncertain political background over the
next few weeks, we believe that markets are likely to remain
volatile in the near term."
    In Latin America, the Brazilian real dipped 0.2%,
after rising for three straight sessions.
    Brazil's economic growth slowed more than expected in the
third quarter as higher interest rates affected household
spending, underscoring challenges facing President-elect Luiz
Inacio Lula da Silva next year.
    The real has underperformed its regional peers in November,
ending last month nearly flat compared to the 1% rise in the
broader Latam index on fiscal policy concerns.
    Brazil's central bank intervened in the foreign exchange
market on Thursday, selling $2 billion in the spot market with a
repurchase agreement, it said in a statement on its website.
    Lula has also pushed back his first Cabinet announcements to
next week, two people familiar with the matter said on
Wednesday, dragging out key appointments that have kept
financial markets on edge.
    Mexico's peso rose 0.6%. Central bank data showed
remittances to Mexico reached a record-high of $5.360 billion in
    A survey showed Mexico's factory activity grew for a third
straight month in November amid sales improvement, job creation.
        Meanwhile, a Reuters poll showed Colombia's inflation
could have peaked in November. The peso currency was up
    Chile's peso gained 1.3%. Traders expect Chilean
interest rate to remain at 11.25% in December even as recession
looms in the top copper producer, with data showing a drop in
the IMACEC economic activity index in October from the same
month last year.
    Peru's Sol inched 0.1% up against the dollar after
data showed consumer prices rose more than expected last month.
    Key Latin American stock indexes and currencies at 2040 GMT:
     Stock indexes              Latest    Daily % change
 MSCI Emerging Markets            978.61            0.65

 MSCI LatAm                      2236.94            0.17

 Brazil Bovespa                111036.28           -1.29
 Mexico IPC                     51753.97            0.13
 Chile IPSA                      5274.68           -0.15
 Argentina MerVal              170478.89           1.159

 Colombia COLCAP                 1243.07            0.04

        Currencies              Latest    Daily % change
 Brazil real                      5.1947            0.03
 Mexico peso                     19.1554            0.50
 Chile peso                        879.1            1.23
 Colombia peso                   4762.98            1.34
 Peru sol                         3.8165            1.01
 Argentina peso (interbank)     167.7200           -0.24

 Argentina peso (parallel)           309            1.62

 (Reporting by Bansari Mayur Kamdar and Devik Jain in Bengaluru
and Karin Strohecker in London; Editing by Kirsten Donovan and
Alistair Bell)

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