* Chile's peso comes off highest level since mid-2019 * Brazilian real touches lowest since late Nov. 2020 * Mexican Dec inflation below expectations, rate cut expected (Updates prices throughout) By Ambar Warrick and Shreyashi Sanyal Jan 7 (Reuters) - Mexican and Chilean pesos eased from recent peaks on Thursday, while the Brazilian real fell to its lowest in over one month against the dollar as civil unrest in the United States prompted a measure of profit taking and safe-haven buying. Chile's peso, the top performing Latin American currency in 2020, tumbled 2% from an over-17-month high, while Mexico's peso dipped 1.7% from a 10-month peak. Brazilian real weakened 1.6% against the dollar, with investors also dissatisfied with the pace of the government's reform agenda. Brazilian Health Minister Eduardo Pazuello said on Wednesday that the government is fully prepared to start its vaccination plan against COVID-19 this month, although it has not yet approved for use either of the vaccines that it has stockpiled. The dollar bounced off 2018 lows after hundreds of supporters of President Donald Trump stormed the U.S. Capitol on Wednesday in a bid to overturn his election defeat. This came on the heels of Democrats taking control of the U.S. Senate, clearing the way for Joe Biden to carry out his reform agenda once he takes office as president on Jan. 20. Emerging market risk assets had rallied on the prospect of higher fiscal spending and corporate taxes in the United States, which weighed on the dollar and U.S. stocks by pushing capital flows out. The prospect of an economic recovery this year also pointed to strong capital flows into emerging markets in the near-term. In Mexico, investors were anticipating the minutes of the central bank's most recent meeting, where it decided to leave lending rates unchanged on a surprise dip in inflation and peso stability. But the decision was reached with a narrow majority in the bank's board. With December inflation coming in slightly below expectations, analysts forecast an interest rate cut next month. "Board members voting for no change likely underlined that the downside surprises in inflation late in the year could have been related to transitory factors ... Benign inflation prints in the coming weeks, and the changes in the central bank's board, support our view of a 25bps cut, to 4.0%," Credit Suisse analysts wrote in a note. Colombia's peso fell 2.2%, having touched a 10-month high earlier in the week on strength in oil prices. Recovering global crude demand is expected to benefit the currencies of oil exporters Colombia and Mexico this year. Key Latin American stock indexes and currencies: Stock indexes Latest Daily % change MSCI Emerging Markets 1319.98 0.35 MSCI LatAm 2482.73 1.07 Brazil Bovespa 121593.01 2.09 Mexico IPC 46091.37 1.11 Chile IPSA 4529.23 2.52 Argentina MerVal 52410.05 1.022 Colombia COLCAP 1440.73 0.33 Currencies Latest Daily % change Brazil real 5.3876 -1.59 Mexico peso 20.0098 -1.87 Chile peso 712.4 -2.40 Colombia peso 3486.99 -2.14 Peru sol 3.6198 0.11 Argentina peso (interbank) 85.0000 -0.11 Argentina peso (parallel) 158 1.27 (Reporting by Ambar Warrick and Shreyashi Sanyal in Bengaluru; Editing by Krishna Chandra Eluri)
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