* Brazil GDP growth next year could top 4% - economy minister * Mexico's peso set to snap two-day losing streak * Regional stocks fall as broader EM retreats (Adds details, updates prices) By Shriya Ramakrishnan and Ambar Warrick Nov 19 (Reuters) - Mexico's peso and Brazil's real led gains across Latin America on Thursday amid hopes of a swift post-pandemic recovery in the region's two largest economies, while most other units eased as excitement over a vaccine cooled with a surge in global infections. Mexico's peso strengthened 1.1% and was set to snap a two-day losing streak, having benefited from the central bank recently signalling a pause to a rate-cutting cycle. Democratic candidate Joe Biden's victory in the U.S. presidential election also raised hopes for more stable trade policies. Mexico earlier this week completed a debt refinancing operation worth $6.6 billion in international markets, including a heavily over-subscribed bond offer. The Brazilian real added 0.6% after the economy minister said Latin America's largest economy could surprise on the upside and grow more than 4% next year. Brazil's central bank also said on Wednesday it will intervene in the foreign exchange market to curb year-end volatility caused by local banks unwinding their so-called overhedge positions. "Although there are multiple factors pointing to a positive outlook for Brazil in the short to medium term–including the stronger-than-expected recovery and preparations for mass vaccination, the fiscal outlook remains troubling," analysts at TS Lombard wrote in a note, adding that progress in fiscal reforms was a sticking point for the government's credibility. The government had recently pledged to fast track reforms to privatization and fiscal spending. Optimism about encouraging developments in vaccines for the novel coronavirus provided an initial boost to Latam risk assets, but like last week, the rally ran out of steam as infections continued to rise and more countries outlined economically-damaging lockdowns. "(Vaccines)are unlikely to have much impact broadly until at least Q2. We think the market is a bit too sanguine and overlooking the near-term outlook, which looks to be more like a hole in the road than a speed bump," Mazen Issa, senior FX strategist at TD Securities wrote in a note. Chile's peso fell 0.1%, while Colombia's peso shed 0.2%. Peru's sol was set to end a two-day winning streak as political uncertainty still weighed. A gauge of Latin American stocks fell 0.4% after hitting a more-than eight-month high, while broader emerging market equities also retreated. Latin American stock indexes and currencies: Latest Daily % change MSCI Emerging Markets 1200.85 -0.55 MSCI LatAm 2182.01 -0.36 Brazil Bovespa 106225.15 0.1 Mexico IPC 41995.30 -0.61 Chile IPSA 4028.50 -1.95 Argentina MerVal 51243.13 -0.102 Colombia COLCAP 1234.03 -0.04 Currencies Latest Daily % change Brazil real 5.3015 0.63 Mexico peso 20.1360 1.12 Chile peso 758.7 -0.11 Colombia peso 3647.95 -0.18 Peru sol 3.5757 -0.17 Argentina peso 80.2700 -0.12 (interbank) (Reporting by Shriya Ramakrishnan and Ambar Warrick in Bengaluru; editing by David Evans and Grant McCool)
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