EMERGING MARKETS-Latam FX firm, Mexican assets hit by poor GDP data

By Susan Mathew

May 24 (Reuters) - Most Latin American currencies climbed on Friday as the dollar weakened, but Mexico's peso and stocks underperformed after data showed that its economy shrank in the first quarter.

Regional currencies, except for Mexico's, rose between 0.2% and 0.6% as the greenback slipped after orders for U.S.-made capital goods fell - further evidence that the broader economy is slowing, due in part to the U.S.-China trade dispute. FRX/

Brazil's real BRL= rose 0.6% on the day and was on track to break a six week losing streak and post gains of about 2.1% this week.

The Mexican peso MXN= was trading flat 1930 GMT.

Mexico's economy shrank in the first quarter from the October-December period, data showed, as services and industrial activity dipped - the first contraction since the second quarter of 2018.

This deals a blow to President Andres Manuel Lopez Obrador's government that took office in December pledging to ramp up lackluster growth and job creation in Latam's No. 2 economy.

"The weak Q1 GDP figure means the economy won't, barring a major surprise, grow by the 2.5% that we had projected ... The next few years will be underwhelming for Mexico's economy," said William Jackson, chief emerging markets economist at Capital Economics.

Mexican shares .MXX touched a two-month low and were on track to end lower for a fourth straight day.

Other stocks in the region were mixed with optimism around the U.S.-China trade war being muted. MKTS/GLOB

President Donald Trump said U.S. complaints against Huawei Technologies might be resolved within the framework of a U.S.-China trade deal and predicted a swift end to the trade war, although no high-level talks have been scheduled between the two countries. MKTS/GLOB

Brazil shares .BVSP slipped 0.26%, down for a third session as losses in financials and consumer discretionary stocks weighed. On the week, the Bovespa index was set to gain around 4%, its biggest since early January.

Uncertainty around the pension reforms also lingered. Brazil's President Jair Bolsonaro urged Congress not to water down the pension reform bill amid threats by the economy minister that he would quit if it was reduced to a "little reform."

Stocks in Colombia .IGBC and Argentina .MERV climbed more than a percent each. On a weekly basis, those in Colombia fell, while Argentina shares rose.

Colombia received mixed messages from ratings agencies on Thursday, with Moody's revising the country's sovereign outlook to stable from negative, while Fitch went the other way and adjusted the outlook to negative from stable.

Key Latin American stock indexes and currencies at 1930 GMT:

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