EMERGING MARKETS-Mexico peso retreats from 4-month high, Latam FX up

    MEXICO CITY, March 16 (Reuters) - Mexico's peso pulled back
from a more than four-month high on Thursday as other Latin
American currencies extended their advance for a second session
on bets the United States will hike interest rates this year
less than previously expected.
    The peso hit 19.05 per dollar earlier in the session,
its strongest since it was battered by the election of Donald
Trump as U.S. President, but its advance flagged as the currency
retreated to around 19.26 per dollar.
    The Mexican peso has been the strongest performing major
currency this year, up close to 8 percent against the dollar,
backed by expectations that Trump will not impose major barriers
on U.S.-bound Mexican goods.
    On Wednesday, the peso got a lift on comments from Trump
trade advisor Peter Navarro who said new free trade talks could
make North America a "powerhouse."
    U.S. Treasury Secretary Steven Mnuchin said on Thursday that
the Trump administration has no desire to get into trade wars,
but certain trade relationships need to be re-examined to make
them fairer for U.S. workers.
    The Fed raised rates for a second time in three months on
Wednesday but both the policy-setting committee and Chair Janet
Yellen said future increases will be "gradual." 
    A slower pace of rate hikes would support demand for
emerging market assets, which tend to lure foreign investors
with higher yields.
    The Chilean and Colombian pesos strengthened
more than 1 percent.
    The Brazilian real, however, slipped after the
central bank indicated it could allow around $4.2 billion worth
of traditional currency swaps, which correspond to future dollar
sales to investors, to expire at the end of the month.

    Key Latin American stock indexes and currencies at 2055 GMT:
 Stock indexes                               daily   YTD %
                                                 %  change
                                  Latest    change  
 MSCI Emerging Markets              963.20    2.09   11.71
 MSCI LatAm                        2624.66    1.39   12.13
 Brazil Bovespa                   65782.85   -0.68    9.22
 Mexico IPC                       48056.56    1.23    5.29
 Chile IPSA                        4616.47    1.49   11.20
 Chile IGPA                       23163.73    1.37   11.72
 Argentina MerVal                 19601.29     1.2   15.86
 Colombia IGBC                     9964.25    0.78   -1.62
 Venezuela IBC                    37783.00    0.38  159.00
 Currencies                                  daily   YTD %
                                                 %  change
 Brazil real                        3.1131   -0.09   26.57
 Mexico peso                         19.26   -0.21  -10.53
 Chile peso                          662.2    1.21    7.17
 Colombia peso                     2917.43    1.65    8.63
 Peru sol                            3.252    0.15    4.98
 Argentina peso (interbank)        15.5225    0.32  -16.36
 Argentina peso (parallel)           15.99    0.44  -10.76

 (Reporting by Michael O'Boyle; Editing by James Dalgleish)