(Recasts with rise in Mexican peso; adds details on Mexico, Brazil currency gains)
June 8 (Reuters) - Mexico's peso on Thursday hit its strongest level since the election of Donald Trump as U.S. president, while Brazil's currency firmed on bets a trial will not oust President Michel Temer.
The peso gained after data showed a jump in inflation to an eight-year high, backing expectations of more central bank interest rate hikes. Higher interest rates lift the appeal of the peso to foreign investors. The peso advanced as far as 18.1625 per dollar, its strongest level since Nov. 9, when Trump's surprise victory drove the currency to a record low on fears he would rip up a trade deal with Mexico.
But the peso bounced back and has been the best-performing major currency this year, up around 14 percent against the dollar as the Trump administration moved toward more constructive talks to renegotiate the North American Free Trade Agreement.
If the peso firms past 18.16, it would be trading at its strongest level since last August.
Meanwhile, Brazil's real firmed after the majority of judges on the country's top electoral court agreed to exclude testimony by executives from conglomerate Odebrecht SA. The ruling potentially strengthens Temer's assertions that his campaign received no illegal funding when he ran as former leftist President Dilma Rousseff's running mate in 2014. The court is expected to rule by Friday on whether to annul the election and unseat Temer.
A favorable verdict would back bets that Temer may be able to cut pension spending and reform labor laws, seen as critical to curb growth of public debt and shore up investor trust.
Key Latin American stock indexes and currencies at 2100 GMT:
Stock indexesLatest Daily YTD
pct pct
changechangeMSCI Emerging Markets1,019.060.33 18.18 MSCI LatAm 2,543.70 -0.858.67Brazil Bovespa 62,755.57 -0.664.20Mexico IPC 49,087.46 -0.387.55Chile IPSA 4,859.67 -0.63 17.06Chile IGPA 24,363.06 -0.59 17.50Argentina MerVal 21,928.76-1.3 29.62Colombia IGBC 10,749.39 -0.086.13Venezuela IBC 92,326.76 10.74191.20
Currencies Latest Daily YTD
pct pct
changechangeBrazil real 3.26370.27 -0.44Mexico peso 18.190.17 14.04Chile peso 664.90.620.87Colombia peso 2,918.75 -0.232.84Peru sol 3.2690.034.44Argentina peso (interbank)15.90500.60 -0.19 Argentina peso (parallel) 16.290.433.25 (Reporting by Michael O'Boyle in Mexico City and Bruno Federowski in Sao Paulo; Editing by Leslie Adler)
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