EMERGING MARKETS-Latin American assets hit by new coronavirus strain caution

    * Investors rush toward dollar safety
    * Mexican peso hits near 1-month low
    * Chilean peso tracks copper declines 

 (Adds comment, details; updates prices)
    By Medha Singh
    Dec 21 (Reuters) - Latin American assets were hit on Monday
as investors preferred the safety of the dollar after the UK
imposed tough restrictions to fight a highly infectious new
coronavirus strain.
    The Brazilian real dropped about 0.3%. The Mexican
 and Colombian pesos eased in tandem with oil
prices, while weakness in the copper market undercut the Chilean
    Global markets were roiled after the discovery of the new
strain, just months before vaccines are expected to be widely
available, sowed new panic and prompted several nations to shut
their borders to Britain.
    "The news headlines today in Europe were not good at all,
but gyrations in financial markets have been exacerbated by poor
liquidity," said Stephen Gallo, strategist at BMO Capital
    "The more important feature of today's FX and equity market
fluctuations is that they occurred after a long period of rising
risk tolerance."
    Fears about the virus more than offset optimism as U.S.
congressional leaders finally agreed on a $900 billion COVID-19
relief package. Hopes of fresh U.S. stimulus, as well as signs
of progress in COVID-19 vaccinations, had supported the region's
markets in the past weeks.
    MSCI's index of Latin American currencies
has recovered about 11% since the U.S. presidential election on 
Nov. 3. But it is still headed for its steepest annual
percentage fall since 2015 as the coronavirus pandemic
exacerbates the region's economic pain.
    The Argentine peso deteriorated at a historic low
of 83.15 per dollar as the country's talks with the
International Monetary Fund (IMF) to extend a loan facilities
program adding to jitters.
    Stocks in Buenos Aires shed 1.2% while sovereign
bonds on Argentina's over-the-counter market fell
1% on an average.
    A basket of Latin American stocks dropped
1.3%, with indexes in Sao Paulo, Bogota and
Mexico City leading declines.
    Key Latin American stock indexes and currencies:
 Stock indexes                                  daily % change
 MSCI Emerging Markets                1257.44            -0.86
 MSCI LatAm                           2428.55            -1.53
 Brazil Bovespa                     116757.21            -1.07
 Mexico IPC                          43336.47            -1.22
 Chile IPSA                           4163.13            -1.13
 Argentina MerVal                    50342.09            -3.83
 Colombia COLCAP                      1388.48            -2.66 Currencies                                     daily % change
 Brazil real                           5.1263            -0.85
 Mexico peso                          19.9547            -0.10
 Chile peso                             725.9            -0.10
 Colombia peso                        3429.69            -0.36
 Peru sol                              3.6048            -0.27
 Argentina peso (interbank)           83.1400            -0.36

 (Reporting by Medha Singh and Shashank Nayar in Bengaluru;
Editing by Alexander Smith and Dan Grebler)