(Updates prices, adds pending pension reform in Brazil and Chile interest rate decision)
By Bruno Federowski
SAO PAULO, Feb 1 (Reuters) - Latin American currencies turned mostly higher on Thursday as hawkish remarks from the Federal Reserve failed to derail a month-long rally fueled by investors' appetite for risk.
In its policy statement on Wednesday, the Fed left U.S. interest rates unchanged but bolstered expectations that they would continue to rise by saying inflation was likely to accelerate this year. Those comments initially led to losses in emerging market currencies, which offer higher yields, but the sell-off proved short-lived.
Instead, traders focused on Friday's key U.S. payrolls report, which is likely to offer additional hints on whether stubbornly slow inflation is accelerating toward the central bank's target.
Currencies from Brazil , Mexico and Colombia firmed between 0.05 percent and 1.35 percent, extending a rally underpinned by expectations of accelerating global growth.
Stock indices also rose throughout the region, except Argentina and Venezuela, although gains were somewhat muted.
Brazil's benchmark Bovespa stock index rose 0.69 percent as a decline in shares of lender Banco Bradesco SA kept a lid on gains.
Bradesco forecast fast loan book growth this year but more pressure on margins, disappointing investors. Goldman Sachs analysts called the company's predictions "conservative." Also in Brazil, the overhaul of the country's social security system to reduce its burden on the government's overdrawn accounts still does not have enough support in Congress, a senior official said on Thursday.
The pension reform bill is the cornerstone of President Michel Temer's efforts to reduce Brazil's budget deficit and is due to be put to a first vote in the lower house in the week of Feb. 19. In Chile, the central bank voted unanimously on Thursday to keep its benchmark interest rate unchanged at 2.5 percent at its monthly policy meeting. The vote was in line with market expectations.
Key Latin American stock indexes and currencies at 2155 GMT:
Stock indexes LatestDaily pctYTD pct
change changeMSCI Emerging Markets 1,248.65-0.47 7.79 MSCI LatAm 3,227.04 0.91 14.1
Brazil Bovespa 85,495.24 0.6911.90Mexico IPC 50,591.15 0.27 2.51Chile IPSA 5,862.57 0.12 5.35Chile IGPA 29,465.12 0.15 5.30Argentina MerVal 34,641.37-0.8515.22Colombia IGBC 12,323.23 1.73 8.38Venezuela IBC 3,187.34-13.1 152.33
CurrenciesLatestDaily pctYTD pct
change changeBrazil real 3.1668 0.05 4.63Mexico peso 18.3570 1.35 7.31Chile peso 597.35 0.00 2.90Colombia peso 2,793.05 1.30 6.77Peru sol 3.211 0.00 0.81Argentina peso (interbank) 19.3500 1.55-3.88 Argentina peso (parallel)19.88 0.35-3.27 (Reporting by Bruno Federowski; editing by Diane Craft)
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