* Brazil's real firms for first time in three sessions * Mexican peso lags after inflation data * Argentina's black market peso hit all-time lows (Updates price action) By Medha Singh Dec 23 (Reuters) - Most Latin American currencies strengthened on Monday in a holiday-shortened week as investors continued buying risky assets on improving sentiment surrounding U.S.-China trade relations and global growth. Bucking the trend, Argentina's black market peso weakened 4.56% to an all-time low of 76.75 to the U.S. dollar, traders said, as the market digested new government data showing economic activity contracted 0.9% in October versus the same month last year. The official peso, supported by capital controls meant to halt a run on the currency, slipped only 0.29% on Monday to 59.99 to the greenback. The MSCI's index of Latin American currencies edged higher, building on a rally that has put the index on pace for its best monthly percentage gain this year as Sino-U.S. trade ructions cooled. China would lower tariffs on a range of products from January 1, its finance ministry said on Monday, as Beijing looks to boost imports amid a slowing economy. Brazil's real gained 0.5% against a steady dollar while currencies of commodity-linked economies - Chilean peso and Colombian peso - tracked higher copper and oil prices respectively. Given the light economic calendar before the holidays, analysts expected a dull trading environment. Investors in Brazil and Argentina will break for a two-day Christmas holiday on Tuesday while markets in Mexico will shut early on Tuesday. The Mexican peso lagged most of its peers as data showed consumer prices in the first half of December slipped well below the central bank's 3% target, raising chances of further monetary easing. The tame inflation comes on the heels of the central bank's move to cut its benchmark interest rate for the fourth straight time. "Soft inflation will allow Mexico's central bank to continue its easing cycle. We expect a further 50 bps of rate cuts over the coming months," said Nikhil Sanghani, an economist at Capital Economics. Key Latin American stock indexes and currencies at 1952 GMT: Stock indexes daily % change Latest MSCI Emerging Markets 1110.28 0.24 MSCI LatAm 2897.98 -0.08 Brazil Bovespa 115205.20 0.07 Mexico IPC 44232.22 -0.61 Chile IPSA 4726.10 -0.21 Argentina MerVal 39671.06 2.689 Colombia IGBC 1653.64 0.66 Currencies daily % change Latest Brazil real 4.0798 0.35 Mexico peso 18.9450 -0.03 Chile peso 754.3 -0.12 Colombia peso 3310 0.57 Peru sol 3.318 -0.12 Argentina peso (interbank) 59.9850 -0.28 (Reporting by Medha Singh in Bengaluru; Editing by Lisa Shumaker)
Our Standards: The Thomson Reuters Trust Principles.