EMERGING MARKETS-Latam assets recover ground after U.S. data; Colombia rate decision eyed

By Lisa Pauline Mattackal

Dec 20 (Reuters) - Latin American stocks and currencies jumped on Friday after a U.S. inflation print helped soothe some concerns over the path of interest rates in the world's largest economy, though indexes tracking both were set for weekly declines.

Colombia's peso COP= was flat against the dollar ahead of an expected 50 basis point interest rate cut later in the day.

"We expect the MPC to lower the policy rate by 50 bp to 9.25%, with one Director opting for a bolder 75bp move, we anticipate that the guidance will leave the door open to further policy normalization so long as the disinflation process remains on track," analysts at Goldman Sachs wrote in a note.

MSCI's index of Latin American currencies .MILA00000CUS and gauge of regional stocks .MILA00000PUS both gained 1%.

A closely watched U.S. inflation print showed only a moderate monthly rise in prices in November, with a measure of underlying inflation posting its smallest gain in six months.

That helped soothe some concerns over higher-for-longer interest rates after the Fed spooked markets by projecting a more cautious stance in 2025 earlier this week.

Still, the change in the Fed's outlook puts emerging markets under more pressure at the year's end, with a rising U.S. dollar and Treasury yields weighing on foreign demand for EM assets, while the threat of tariffs from U.S. President-elect Trump's incoming administration looms.

MSCI's Latam stock index is set for its worst week since June with an over 4% loss, while the currency index is set to slip 0.2% for the week.

Brazil's real BRBY rose 0.6% against the dollar, continuing to recover after sinking to all-time lows earlier in the week, after the central bank intervened yet again via a spot dollar auction with more scheduled later in the day.

Worries about the country's fiscal sustainability have dented its markets in recent days. Brazil's Congress approved late on Thursday most of the bills in a fiscal package which includes spending-containment measures.

Mexico's peso MXN= gained 0.6% a day after its central bank eased policy by an expected 25 bps, one of a bevy of EM central bank decisions this week ahead of the Christmas holiday.

Most Latin American stock indexes were steady or higher, barring Argentina's Merval which lost 1.5% and a 0.3% loss in Chilean stocks .SPIPSA.

Both MSCI's global emerging markets currency .MIEM00000CUS and stock .MSCIEF indexes were set for their worst weekly performance in over a month.

HIGHLIGHTS

** Russian central bank keeps rates on hold after Putin's call for 'balance'

** High prices impinging on India's growth, central bank minutes show

** Hungary's parliament backs 2025 budget plan, deficit target seen at risk

Key Latin American stock indexes and currencies at 1530 GMT:

(Reporting by Lisa Mattackal in Bengaluru; Editing by Franklin Paul)

((LisaPauline.Mattackal@thomsonreuters.com;))