* Mexican, Colombian pesos rise as oil prices firm * Brazil's real trades lower, joins Chilean peso in the red * Argentina refuses to devalue currency or seize bank deposits (Updates prices throughout) By Shreyashi Sanyal Oct 14 (Reuters) - Currencies of oil-exporters Mexico and Colombia rose on Wednesday on the back of higher crude prices, while Brazil's real gave back early gains as investors continued to worry about the country's public finances. The Mexican peso gained 0.3%, while Colombia's peso added 0.6% after crude prices rose as the dollar weakened and global equities rose. The U.S. dollar gave back gains it made on cautious trading amid diminishing hopes for a COVID-19 vaccine or U.S. fiscal stimulus. Global risk sentiment had been shaken after two separate high-profile coronavirus vaccine trials by Johnson & Johnson and Eli Lilly were halted. "While hurdles like these should be expected, investors react sensitively to such news, especially now when many parts of the world are facing a sharp increase in COVID-19 cases," said Milan Cutkovic, market analyst at Axi. Brazil's real turned lower by midday trading as investors grew doubtful of the government's ability to fund a new fiscal package without overshooting its spending ceiling. Latin America's largest economy has, however, benefited from strengthening demand from China, which is one of its biggest trading partners. "The rapid post-pandemic policy response combined with exposure to Chinese demand for industrial commodities have fueled an early economic recovery (in Brazil) compared with many EM peers," strategists at MRB Partners said. Most emerging markets have been struggling to control the spread of the coronavirus, slowing the pace of recovery in these regions. The International Monetary Fund warned on Tuesday of a worsening outlook for EM markets. Chile's peso extended declines to the third day, to fall 0.2%, despite rising copper prices. Supervisors at Chile's Escondida mine and mine operator BHP decided on Tuesday to extend negotiations over a labor contract for another day in a last-ditch attempt to stave off a strike at the world's largest copper deposit. Data showed Argentina consumer prices rose 2.8% in September versus a month earlier, just above forecasts. Meanwhile, President Alberto Fernandez said Argentina will not devalue its currency or seize bank deposits despite a financial crisis compounded by the COVID-19 pandemic. Argentina's peso continued to weaken. The MSCI's index for Latin American stocks rose 0.6%, with Sao Paulo stocks leading the advance as heavyweights Petrobras and Vale gained. Key Latin American stock indexes and currencies at 2008 GMT: Stock indexes Latest Daily % change MSCI Emerging Markets 1134.73 -0.15 MSCI LatAm 1922.28 0.55 Brazil Bovespa 99473.02 0.98 Mexico IPC 38015.23 -0.31 Chile IPSA 3664.40 0.27 Argentina MerVal 47233.32 2.693 Colombia COLCAP 1171.36 0.05 Currencies Latest Daily % change Brazil real 5.5977 0.06 Mexico peso 21.3090 0.18 Chile peso 798.9 -0.16 Colombia peso 3837 0.60 Peru sol 3.5898 0.03 Argentina peso 77.4700 -0.05 (interbank) Argentina peso (parallel) 163 1.84 (Reporting by Shreyashi Sanyal in Bengaluru; Editing by Andrea Ricci and Marguerita Choy)
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