* Brazilian President Bolsonaro tests positive for coronavirus * Brazil's real erases earlier gains * Chile's peso supported by strong export data * Mexican peso pressured by weak oil (Updates prices throughout) By Shreyashi Sanyal July 7 (Reuters) - Brazil's real erased gains from earlier in the session on Tuesday, on caution about the alarming spread of the coronavirus after the country's president, Jair Bolsonaro, tested positive for the virus, while the Mexican peso weakened with sliding oil prices. The real, after having shed more than 25% for the year on heightened political risks and soaring COVID-19 cases, came under pressure as Bolsonaro, long a skeptic about the coronavirus, tested positive for it. The pandemic has killed more than 65,000 people in Brazil, which currently stands as the second-worst hit country in the world by the pandemic after the United States, in terms of infections. Regional currencies were also hurt by safe-haven flows into the U.S. dollar. Mexico's peso fell 2% to the dollar, tracking weakness in the crude market as rising cases cast doubts over oil demand. Further clouding an economic recovery from COVID-19, a top Mexican health official said the country's coronavirus pandemic could last until next April. "After a hot start, risk is in retreat. We think the market is largely in a waiting game over a multitude of issues related to COVID-19 and politics. That will take time and at a minimum suggests choppy price action for the foreseeable future," analysts at TD Securities wrote in a note. Brazilian stocks fell 1.3%, coming off a four-month high. Iron ore miner Vale SA was among the top drags on the Bovespa, after it flagged a $400 million impairment charge related to the planned sale of its long-troubled nickel and cobalt operations on the Pacific island of New Caledonia. Latin American stocks have benefited more from recent liquidity measures, in comparison with currencies, which have been pressured by record-low borrowing rates and sustained dollar demand. Chile's peso was propped up by data showing increased copper exports in June, while total exports also rose from last year. A recent rally in copper prices has also helped the peso, given that the red metal is Chile's largest export. Chilean stocks fell about 0.63% from a near four-month high. Key Latin American stock indexes and currencies at 2008 GMT: Stock indexes Latest Daily % change MSCI Emerging Markets 1051.31 -0.87 MSCI LatAm 1949.62 -2.34 Brazil Bovespa 97661.15 -1.29 Mexico IPC 37843.96 -0.11 Chile IPSA 4257.45 -0.63 Argentina MerVal 42588.46 -1.733 Colombia COLCAP 1131.84 0.21 Currencies Latest Daily % change Brazil real 5.3810 0.07 Mexico peso 22.8035 -2.09 Chile peso 789.7 1.16 Colombia peso 3624.61 0.31 Peru sol 3.5368 0.20 Argentina peso (interbank) 70.8700 -0.07 Argentina peso (parallel) 123 3.25 (Reporting by Shreyashi Sanyal and Ambar Warrick in Bengaluru; Editing by Sandra Maler and Jonathan Oatis)
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