Chile's peso leads gains on copper price boost, Mexico's peso at one-week high

The Chilean peso spearheaded the gains among major Latin American currencies against a muted dollar on Friday on rising copper prices, while the Mexican peso touched a one-week high following strong economic growth data.

Chile's peso USDCLP advanced 1.3%, snapping a three-day losing streak, while the Peruvian sol USDPEN gained 0.5% as higher copper prices boosted the currencies of the major copper exporting nations.

The Mexican peso USDMXN advanced 1.2% after data showed Latam's second-largest economy grew for the sixth quarter in a row in the first quarter, with gross domestic product increasing 1% in the period.

Analysts have remarked on the attractive yield the currency offers, despite the Bank of Mexico holding interest rates at 11.25% at its latest meeting, given the economic resilience.

The currency has outpaced its regional peers this year, rising 10.6% against the greenback, largely on strong economic growth and a growing trend of "nearshoring" with foreign companies looking to bring manufacturing closer to home.

"Mexico has been a major beneficiary of the deep globalization with the U.S. looking at Mexico more and more increasingly for near shoring and that's a powerful relationship," said Quincy Crosby, chief global strategist at LPL Financial.

Analysts have also said that a steep U.S. recession in the United States might weaken the peso later this year, but chances of that remain slim.

A jump in oil prices also benefited Mexico's peso as well as the currency of Colombia USDCOP, which gained 1.1%, as both countries are leading crude exporters.

The Brazilian real USDBRL, (BRBY) gained 1% against the dollar, set for its biggest one-day jump in a month, a day after logging its steepest one-day fall in over a month following inflation data which exerted pressure on the country's central bank to lower interest rates.

Data showed Brazil posted a current account deficit of $1.68 billion in April, way larger than the $0.25 billion expected by economists polled by Reuters.

Broader Latin American currencies (.MILA00000CUS) were up 0.6%, but have been pressured this week as the absence of a U.S. debt ceiling agreement and expectations of U.S. interest rates staying elevated for longer pushed investors towards the safe-haven dollar DXY.

The dollar came off the day's lows after a fresh inflation data, as markets raised bets on higher-for-longer interest rates and nervously eyed last-ditch talks on the U.S. debt ceiling.

Latam stocks (.MILA00000PUS) jumped 1.3%, with Brazil's Bovespa IBOV index leading gains on a boost from miners.

Elsewhere, the Turkish lira hit a record low beyond 20 against the dollar on Friday, ahead of this weekend's presidential election runoff.

Mexican President Andres Manuel Lopez Obrador said that U.S. bank Citigroup C wants its Mexican business to have Mexican shareholders amid a planned IPO.

On the political front, Lopez Obrador said he does not want Mexico to have economic or commercial relations with Peru "until there is democratic normality" in the Andean country.

Latin American stock indexes and currencies at 1935 GMT: