* Brazil's real up 2.4%; cenbank sees less scope for rate cuts * Upbeat PMIs from Europe, U.S. fuel hopes for economic recovery * MSCI's latam stocks index up 1.5% * Foreign flows to Latam risks "drying out"- Colombian ex-finmin (Updates prices) By Susan Mathew June 23 (Reuters) - Latin American stocks and currencies rose on Tuesday as upbeat data from Europe and the United States raised hopes of an economic recovery, with Brazil's real jumping 2.4% after its central bank saw little scope to cut interest rates much further. The real extended gains to a third session after minutes of the central bank's last meeting showed monetary policy committee members urged caution in easing rates. The real had underperformed last week after the central bank cut its key interest rates further into record low territory. Also aiding sentiment in Brazil were new measures to help mitigate economic damage from the coronavirus pandemic, including a credit program for small firms that could total 55.8 billion reais ($10.85 billion), and $3 billion in emergency aid for power companies. Other regional currencies traded flat to higher against a weaker dollar, with Colombia's peso touching a near two-week high. MSCI's index of Latam stocks, meanwhile, rose 1.5%, with main stock indexes in Brazil and Mexico up 0.6% and 0.4% respectively. The moves were in line with global markets that cheered confirmation that the U.S.-China trade pact was "fully intact", after earlier confusing statements from the White House. Investors also took heart from a slowing pace of contraction in PMIs in Europe and United States. But foreign investment in Latam risks "drying out" due to economic turmoil and fiscal instability sparked by the pandemic, especially if Chinese-led commodity demand remains weak, Mauricio Cardenas, a former Colombian finance minister, said in an interview with the Reuters Global Markets Forum on Tuesday. Regional markets have been hit by selling pressure recently amid the surging number of COVID-19 cases in Latin America. The MSCI's index of Latin American currencies is down 17% this year, while its currency counterpart is down about 32%, despite double digit percentage recoveries since year-lows. More bleak growth forecasts continued to pour in for South American countries, as Chile's Budget Office said on Monday the economy would shrink 6.5% in 2020, a far deeper contraction than predicted just two months ago. For Colombia, the release of the Medium Term Fiscal Framework next week will be key in determining if the country can preserve its investment grade status, Cardenas said, against the backdrop of its decision to suspend deficit limits until 2022. Key Latin American stock indexes and currencies at 1948 GMT: Stock indexes Latest Daily % change MSCI Emerging Markets 1014.74 1.45 MSCI LatAm 1981.66 1.48 Brazil Bovespa 95895.26 0.59 Mexico IPC 38271.63 0.39 Chile IPSA 4024.26 0.64 Argentina MerVal 40959.94 1.526 Colombia COLCAP 1144.51 -1.46 Currencies Latest Daily % change Brazil real 5.1475 2.40 Mexico peso 22.4160 0.31 Chile peso 818.3 -0.22 Colombia peso 3698.25 0.75 Peru sol 3.5217 -0.47 Argentina peso 70.0300 -0.07 (interbank) (Additional reporting by Aaron Saldanha and Lisa Pauline Mattackal in Bengaluru; Editing by Sonya Hepinstall)
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