(New throughout, adds gains in Brazil, Chile stocks; outlook on currencies)
By Flavia Bohone and Sheky Espejo
SAO PAULO, Jan 5 (Reuters) - Brazilian and Chilean stocks hit record highs on Friday, boosted by solid economic growth data, while Mexico's peso firmed to its strongest level in more than two weeks.
Chilean equities were lifted by data that showed the economy grew at its fastest pace in almost two years, while Brazil's main stock index hit a record high after data showed industrial production rose for the third month in row.
Demand for Brazilian stocks has been fed so far this year by the view that leftist ex-president Luiz Inacio Lula da Silva could be convicted at the end of January in a corruption trial, which may dim chances for the left to win in elections this year.
A Reuters poll on Friday found the Brazilian currency would likely lose ground this year amid uncertainty over whether President Michel Temer's structural reforms will survive the most wide-open election in decades.
Meanwhile, the Mexican peso was seen losing ground in the first half of the year as traders hedge against a potential victory by a leftist frontrunner. Mexico's peso led gains for the region's currencies on Friday, capping a week where it advanced about 2.5 percent against the dollar.
The peso has been helped by bets that the country's central bank could hike interest rates again, with inflation close to a 16-year high.
However, analysts warned the currency would struggle to gain much more ground amid fears that U.S. President Donald Trump could pull out of a free-trade deal with Mexico.
The next set of talks between Mexico, the United States and Canada on the future of the North American Free Trade Agreement (NAFTA) are set for later this month in Montreal.
Key Latin American stock indexes and currencies at 2025 GMT:
Stock indexesdaily %YTD %
Latestchange changeMSCI Emerging Markets 1201.53 0.75 2.94 MSCI LatAm 2972.61 0.46 4.63Brazil Bovespa 79071.47 0.54 3.49Mexico IPC 49770.78 0.05 0.84Chile IPSA 5695.43 1.07 2.35Chile IGPA 28636.41 1.09 2.34Argentina MerVal 32205.59 0.79 7.12Colombia IGBC 11781.61 0.49 3.61Venezuela IBC 1263.670 0.04
Currencies daily %YTD %
change change
Latest Brazil real 3.2291 0.10 2.61
Mexico peso 19.1850 0.45 2.68
Chile peso 605.8-0.15 1.46Colombia peso 2905.3-0.66 2.64Peru sol 3.212-0.09 0.78
Argentina peso (interbank)18.8600-1.22-1.38 Argentina peso (parallel)19.4 0.05-0.88 <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Poll on Latam FX ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>(Writing by Michael O'Boyle; Editing by David Gregorio)
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