EMERGING MARKETS-Latin American assets rise as investors weigh US data, regional central bank signals

By Sudeshna Ghoshal and Ragini Mathur

Nov 6 (Reuters) - Latin American stocks and currencies edged higher on Friday as investors weighed the US midterm election results, a strong US jobs report and regional central bank policy signals.

MSCI's Latin American currency index .MILA00000CUS rose 0.4%, but was still set for a second consecutive weekly loss. The regional equities index .MILA00000PUS gained 0.9%, though it was little changed for the week after three straight weekly declines.

US Democrats' sweeping victories in the midterm elections on Tuesday fueled hopes of de-escalation in the US-Israeli war with Iran, helping push crude prices sharply lower. But concerns that the new Democratic-controlled Congress could subject AI data-center spending to greater scrutiny hit technology shares, while a broader risk-off mood weighed on other markets.

A stronger-than-expected US jobs report reinforced expectations of a Federal Reserve interest rate hike next month, with the dollar rising 0.6% against a basket of currencies.

Mexico's peso rose 0.6%, recovering some losses triggered on Thursday after Banxico, as the central bank is also called, unexpectedly cut its benchmark rate by 25 basis points. The bank called the move a "one-time adjustment."

The peso was nevertheless on track for modest weekly gains, which would end an eight-week losing streak driven by uncertainty over US trade talks and dovish minutes from the central bank's policy meeting in September.

"Banxico is clearly focused on weak growth in Mexico and the negative output gap. It is not worried about the weaker peso contributing to higher inflation, given its view that pricing power for the consumer sector is very weak," said Chris Turner, global head of markets research at ING.

"In a world where central banks are tightening to ride out the inflation hump, Banxico really stands out now. Its position leaves the peso very vulnerable to any pickup in external risk."

Mexican shares .MXX were up 0.1%, rising for a third day and heading for a weekly advance.

MODEST REBOUND IN BRAZIL

Brazil's real was up 0.3%. The central bank on Wednesday paused its easing cycle, holding rates steady amid a worsening inflation outlook following President Luiz Inacio Lula da Silva's reelection last month.

The Bovespa .BVSP gained 1.5% and was set for a modest weekly rise after a steep selloff last week.

In Argentina, a central bank survey on Thursday showed analysts lowering their 2026 growth forecasts while raising inflation expectations. Local markets were closed for a public holiday.

Chile's peso was muted, while the country's stock index .MMXIPSAGC climbed 1.2%. Consumer prices rose 0.5% in October from the prior month, accelerating from the 0.4% increase in September as fuel costs climbed, though the reading came in below forecasts.