* Chile's peso gains on higher copper prices * Latin American FX index climbs after two days of declines * Brazilian miner Vale hits over one-year high * Mexican peso, Peruvian sol, Colombian peso firm By Sagarika Jaisinghani and Ambar Warrick Jan 17 (Reuters) - Gains in the Chilean peso lifted Latin American currencies on Friday, as stronger-than-expected economic data from China added to optimism about faster global growth in the wake of a Sino-U.S. trade truce. Chile's peso was on track for its best day in more than a week as a surprise acceleration in Chinese industrial output sent copper prices near an eight-month high. Chile is the world's top producer of the red metal. The currency is also set to end the week higher, after declining in the past two weeks on caution over anti-government protests last year. "The (Chilean peso), relative to the rest of the region, has really underperformed so we do see it coming back," said James Barrineau, head of emerging market debt at asset manager Schroders. "Stable growth in China is certainly very important for Chile. The peso almost trades like an Asian currency rather than a Latin American currency, in terms of its correlation to Asian fundamentals and China growth." An index of Latin American currencies was up 0.1% after declining for two straight sessions. Still, the basket was set for its biggest weekly drop in over two months, pressured by a fall in one of its biggest constituents: the Brazilian real. The real, which firmed about 0.3% on Friday, has lagged its regional peers since last year on economic instability in the country, which prompted the central bank to trim interest rates four consecutive times in 2019. Latest data from Latin America's biggest economy showed a slight pickup in economic activity for November, confirming earlier indications of an improvement in GDP heading into 2020, and sparking hopes of a moderate increase in the real later this year. Brazilian equities rose about 1%, powered by a 2.4% gain for Vale SA. The miner said on Thursday it had halted tailings operations at its Esperança mine to potentially carry out work to improve safety at the site, sending the benchmark Dalian iron ore futures higher. The Mexican peso was up 0.2%, while the Peruvian sol and Colombian peso added 0.1% and 0.3%, respectively. Key Latin American stock indexes and currencies at 1450 GMT: Stock indexes Latest Daily % change MSCI Emerging Markets 1145.75 0.45 MSCI LatAm 2909.73 0.82 Brazil Bovespa 117825.75 0.96 Mexico IPC - - Chile SPIPSA 4880.49 -0.27 Argentina MerVal 42707.59 0.815 Colombia Colcap 1648.99 0.07 Currencies Latest Daily % change Brazil real 4.1779 0.27 Mexico peso 18.7405 0.17 Chile peso 772.3 0.41 Colombia peso 3311.31 0.29 Peru sol 3.3198 0.07 Argentina peso (interbank) 60.0250 -0.07 (Reporting by Sagarika Jaisinghani in Bengaluru Editing by Nick Zieminski)
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