EMERGING MARKETS-Latam FX dips, Brazil's real up on strong services data

    * Real the sole gainer in Latam
    * Chile's peso flat after rate hike rally
    * Petrobras up as Bolsonaro considers privatization 

    By Ambar Warrick
    Oct 14 (Reuters) - Brazil's real rose on Thursday as data
showed service sector activity grew more than expected, while
most other Latin American currencies were muted as U.S. economic
data fed bets on early tapering by the Federal Reserve. 
    The real added 0.2% and was the sole gainer in
Latin America, recovering from near six-month lows after 
services activity grew 16.7% in August from last year,
indicating some resilience in the economy.
    "We expect some of the COVID impacted services sectors to
recover further in coming months in tandem with further progress
on the COVID vaccination program, reopening of the economy, and
renewed fiscal stimulus," Goldman Sachs analysts wrote in a
    "However, accelerating inflation, rising interest rates,
heightened political noise and policy uncertainty, and the
interruption of the uptrend in consumer and business confidence
may cap the upside."
    Latin America's largest economy and most emerging markets
are under threat from heightened inflation, which is likely to
negate any momentum in an economic recovery. 
    Rising fuel prices, global supply chain disruptions and an
energy shortage are all poised to feed into inflation, and have
dented sentiment towards emerging markets in recent weeks. 
    Chile's peso fell 0.1% after jumping 1% on Wednesday,
when the central bank hiked rates by 1.25% to 2.75%, amid
growing inflationary pressures in the country.
    The move was bigger than projected by analysts. But the
central bank did not provide any concrete signals on whether it
intended to keep hiking rates.
    Still, the move brings lending rates in Chile closer to its
emerging market peers, which is likely to benefit the peso.
    Expectations of tapering in the United States grew after
data showed a steep decline in weekly jobless claims, while a
separate reading showed producer price inflation on the rise.
    Tapering of stimulus measures will push up lending rates in
the developed world, which in turn tends to make emerging market
assets appear less attractive.
    Mexico's peso fell 0.4% to the dollar, the most among
its regional peers, while Colombia's peso shed 0.3%. 
    Among Latin American stocks, Brazilian oil and gas firm
Petrobras rose 1% as President Jair Bolsonaro said he
was inclined to take the firm private, while also outlining
possible regulations on local fuel prices.
    But Brazil's Bovespa index was weighed down by
losses in financial stocks. 
    Key Latin American stock indexes and currencies:
                              Latest     Daily % change
 MSCI Emerging Markets         1267.00               0.54
 MSCI LatAm                    2249.82               0.96
 Brazil Bovespa              113483.34               0.02
 Mexico IPC                   51985.65               0.33
 Chile IPSA                    4016.11               0.24
 Argentina MerVal                    -                  -
 Colombia COLCAP               1397.63               0.24 Currencies             Latest     Daily % change
 Brazil real                    5.4951               0.22
 Mexico peso                   20.6225              -0.36
 Chile peso                     815.58              -0.09
 Colombia peso                 3748.03              -0.28
 Peru sol                         3.97              -0.12
 Argentina peso                99.1500              -0.02

 (Reporting by Ambar Warrick; Editing by Giles Elgood)