EMERGING MARKETS-Most LatAm currencies fall versus dollar

* Most of LatAm currencies weaken on US dollar strength

* Debt spreads widen yet returns remain high

* S&P cuts credit rating of Baltic states Estonia, Latvia

By Manuela Badawy

NEW YORK, Aug 10 (Reuters) - Most Latin American currencies
weakened on Monday against the U.S. dollar, which continued to
appreciate on strong U.S. job numbers on Friday.

The better-than-expected non-farm payrolls report on
Friday, which showed employers cutting far fewer jobs in July
than expected, pushed investors to buy up the dollar on the
hope that the U.S. economy will emerge more quickly from
recession compared to other major economies.

Brazil's currency, the real BRBY, weakened 1.4 percent to
1.85 reais per dollar but has hovered near its strongest level
since last September in recent sessions. The Colombian peso
COP=STFX fell 1.01 percent to 2,032 per dollar.

These two currencies still remain firm as their "domestic
economy looks strong enough to mitigate external demand and
where the global cycle is less dominant," Benito Berber, Latin
America strategist at RBS Securities Inc. in Greenwich,
Connecticut, said in a note to clients.

Mexico's peso MXN= MEX01, approaching highs not seen
since November, gained 0.18 percent to 12.93 per U.S. dollar,
as the recent data that supports hopes for a recovery in the
United States is also good news for Mexico due to its close
ties to the U.S. economy.

The Chilean peso CLP=CL closed down 0.77 percent to 547
per dollar while the Peruvian sol PEN=PE lost 0.31 percent to
2.937 per dollar.

Latin American stocks eased with the MSCI's regional index
.MILA00000PUS falling 0.82 percent following a weak U.S.
equity market as investors took profits after last week's
rally.

Brazil's benchmark Bovespa index .BVSP advanced 0.42
percent to 56,566.76. The index has gained about 9 percent
since July 15.

Emerging debt spreads were 11 basis points wider at 348
basis points over comparable U.S. Treasuries, according to JP
Morgan's Emerging Markets Bond Index Plus (EMBI+)
11EMJ.JPMEMBIPLUS.

Investors in sovereign bonds of emerging economies have
gained 17.5 percent in returns so far this year, according to
JP Morgan. Emerging Eastern European sovereign bonds have
returned the most -- 20.4 percent gain over the original
investment.

On Monday, however, Standard & Poor's cut the credit rating
of Baltic states Estonia and Latvia on rising economic
challenges.

Estonia was cut to A-minus from A, on the country's need to
reduce its dependence on external financing, which would risk
delaying adoption of the euro currency. [ID:nN10547441]
Meanwhile, Latvia was cut to BB from BB-plus, on rapidly
contracting nominal and real incomes and pressures on public
finances. [ID:nN10464031]
(Reporting by Manuela Badawy; Editing by Kenneth Barry)