Mexican peso gains; Colombian peso winner of the week

Mexico's peso rose on Friday after the central bank held interest rates, while most other Latin American currencies fell and were set for weekly losses as initial optimism over a coronavirus vaccine gave way to uncertainty over its delivery.

The peso rose 0.7% after the bank held rates on Thursday, saying that it gave policymakers more options to establish inflation trends and observe the country's economic recovery.

Still, the currency was set to end the week largely unchanged, having pared most of its initial gains this week on optimism over the vaccine, and expectations of stabler US trade policy after Joe Biden's presidency win.

"(The central bank) is making it clear that it wants to be certain that inflation continues to move towards the middle of its target range at 3%," Elisabeth Andreae, FX and EM analyst at Commerzbank wrote in a note.

"The peso's reaction to the rate decision remained muted as the central bank left the door open for further monetary policy easing. The imminent end of the rate cut cycle is largely priced in."

Brazil's real rose 0.3% after a central bank survey showed the country's economic activity rose more than expected in September, pointing to a strong performance in the third quarter.

The real was set to lose slightly for the week.

Colombia's peso fell slightly for the day, but was set to outperform its peers for the week with a 2% gain, recently taking support from the government trimming its expectations for an economic contraction in 2020.

The country also outlined regulatory changes for pension funds to have more flexibility about investment options, in order to increase liquidity and help an economic recovery.

While emerging markets are set to eventually benefit from risk-driven capital inflows with the advent of a vaccine, they are likely to face shore-term headwinds from uncertainty over when the vaccine will be released.

Peru's sol was set for steep weekly losses after the ouster of President Martin Vizcarra sparked political unrest in the country.

Argentina's central bank hiked interest rates on Thursday to rein in rampant inflation. But the peso showed little reaction, given that it is subject to strict capital controls.

Latin American stocks fell 0.3%, but were set to gain for the week as expectations of easy monetary policy saw yield-hungry investors buying into equities.

Elsewhere, Russia raised 2 billion euros ($2.36 billion) in Eurobonds on Thursday as it tapped the global debt market for the first time this year.