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EMERGING MARKETS-Latam FX dip as dollar rallies; Brazil's real slides to near 6-month low

 (Updates to close)
    By Ambar Warrick and Susan Mathew
    Oct 11 (Reuters) - Most Latin American currencies weakened
on Monday, with Brazil's real hitting near six-month lows as a
dollar rally added to risk aversion spurred by worries about a
global energy crunch. 
    Oil and coal shortages have hit several major economies in
recent weeks, with factory shutdowns in China being especially
concerning for Latin America, given the region's heavy
dependence on the country.
    Concerns over debt defaults in China's property sector also
weighed, with Chinese local and dollar-denominated bonds
slumping on the prospect of missed payments by China Evergrande
and its peers. 
    The dollar rallied on rising bets that the U.S. Federal
Reserve will announce a tapering of its massive bond-buying next
month despite softer U.S. payrolls.
    Crude exporter Mexico's peso fell 0.5% even as oil
prices hit multi-year highs. Waning risk appetite has made the
peso less attractive as a destination for carry trade.   
    "The market continues to price in more (central bank) hikes
over the next 12 months than our economists think will be
delivered, leaving MXN vulnerable to a potential dovish front
end repricing," strategists at JPMorgan said in a note. 
    High inflation prints last week, coupled with rising oil
prices and laggard energy supplies, have fed concerns that
inflation will stay elevated for longer and potentially weigh on
an economic recovery despite central bank efforts to mitigate
its impact. 
    Still, some analysts said concerns over an energy-led
inflation spike were overplayed and that prices would stabilize
eventually. 
    "Overall we expect only a modest impact on growth and
inflation from the current increase in energy prices," Mark
Haefele, chief investment officer at UBS Global Wealth
Management, wrote in a note.
    Brazil's real fell 0.2%. A central bank market
survey showed a rise in interest rate projections for 2022, to
8.75% from 8.5%, amid rising inflation forecasts.
    Brazil's benchmark rate currently stands at 6.25%, and the
central bank has hinted at more hikes this year. 
    The real has fallen around 12% from its highs this year,
despite five interest rate hikes by the central bank to rein in
inflation. Political uncertainty ahead of general elections next
year has been one of the main sources of risk in Latam's largest
economy. 
    While most Latin American stocks tracked gains in their
broader emerging market peers, Brazil's Bovespa broke a
four-day winning steak, down 0.4%, as bank stocks fell.  
    Chilean and Argentine markets were closed for a holiday.
    
    Key Latin American stock indexes and currencies:
   Stock indexes           Latest    Daily %
                                     change
 MSCI Emerging Markets      1265.48     0.67
                                     
 MSCI LatAm                 2221.46    -0.11
                                     
 Brazil Bovespa           112368.84    -0.41
                                     
 Mexico IPC                51710.93     1.12
                                     
 Colombia COLCAP            1411.12     0.72
                                     
                                            
      Currencies           Latest    Daily %
                                     change
 Brazil real                 5.5249    -0.20
                                     
 Mexico peso                20.8165    -0.61
                                     
 Colombia peso              3758.64     0.17
                                     
 Peru sol                    4.0655     0.63
                                     
 
 (Reporting by Ambar Warrick; Editing by Nick Macfie and Dan
Grebler)
  
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