EMERGING MARKETS-Mexico peso dips on fears of China-U.S. trade war

 (Updates prices)
    By Bruno Federowski
    BRASILIA, April 2 (Reuters) - The Mexican peso weakened on
Monday after China slapped tariffs on several U.S. products as
retaliation against U.S. protectionism, fueling concerns of a
trade war between the world's two biggest economies.
    China raised tariffs by up to 25 percent on 128 products
from frozen pork and wine to fruits and nuts. Soon after the
announcement, an editorial in the widely read Global Times
newspaper warned that if the United States had thought China
would not retaliate or would only take symbolic
counter-measures, it could "say goodbye to that delusion."
    The measure drove traders to sell risky assets and seek
protection on the U.S. dollar. Currency markets in Mexico,
itself embroiled in thorny trade negotiations with U.S.
President Donald Trump's administration, were among the most
affected.
    The peso "will need some positive news from NAFTA
negotiations in April and a change in the trend in presidential
polls, to make inroads to below 18.00 (pesos to the dollar),
otherwise, we may see ourselves looking at 19.00 again,"
strategists at Continuum Economics wrote in a client note.
    However, the peso narrowed its losses after Bloomberg
reported that Trump's administration was working to reach a
preliminary deal to modernize the North American Free Trade
Agreement ahead of the Summit of the Americas, which begins in
Peru on April 13. 
    The peso was trading at 18.26 to the dollar in
afternoon trading, down 0.55 percent.
    Volumes were thin in the region as traders returned from the
Easter holiday-lengthened weekend. 
    Local factors drove some gains in stock markets, though
risk-aversion curbed the advance. Brazil's benchmark Bovespa
stock index slipped, however, to end 0.8 percent lower.
Earlier shares of miner Vale SA had jumped on the
heels of a new dividend policy.
    Meatpacker BRF SA also rose as traders bet it
could benefit from China's tariffs on U.S. pork exports.

    Latin American stock indexes at 1956 GMT:
 Stock indexes                           daily %     YTD %
                             Latest       change    change
 MSCI Emerging Markets         1217.67      0.58      4.51
                                                  
 MSCI LatAm                    3007.28     -0.32      6.67
                                                  
 Brazil Bovespa               79831.76       0.1      4.49
                                                  
 Mexico IPC                   49510.15      0.25      0.32
                                                  
 Chile IPSA                    5745.95      0.22      3.26
                                                  
 Chile IGPA                   28911.17      0.28      3.33
                                                  
 Argentina MerVal             33542.68     -0.24     11.56
                                                  
 Colombia IGBC                11727.78      1.47      3.14
                                                  
 Venezuela IBC                 2324.29     17.01     84.01
                                                  
 
 (Reporting by Bruno Federowski; additional reporting by Julia
Love; editing by Grant McCool and James Dalgleish)