As data showed that Bolsonaro pressed against expectations, Brazil the sole gainer in Latam Chile's peso flat after rate hike rally Petrobras as Bolsonaro considers privatization By Ambar Warrick Oct 14 Reuters - Brazilian's real rose on Thursday as data showed service sector activity grew more than expected. Most other Latin American currencies were muted as U.S. economic data fed bets on early tapering by the Federal Reserve. The real increased 0.2% and was the sole gainer in Latin America, recovering from close six-month lows after services activity grew 16.7% since last year in August, indicating some resilience in the economy. We expect some of the COVID impacted services sectors to recover in parallel with further progress on the COVID vaccination program, refreshed fiscal stimulus and favorable tax revenue, Goldman Sachs analysts wrote in a note. However, the combination of rising inflation, rising interest rates, rising political noise and policy uncertainty, and the interruption of the uptrend in consumer confidence may cap the upside. Latin America's largest economy and most emerging markets are under the threat of heightened inflation, which is likely to negate any momentum in an economic recovery. Rising fuel prices, global supply chain disruptions and an energy shortage are all poised to feed into inflation and have dented sentiment towards emerging markets in recent weeks. Chile's peso fell 0.1% after jumping 1% on Wednesday when the central bank hiked rates by 1.25% to 2.75% amid growing inflationary pressures in the country. The move was bigger than projected by analysts. However, the central bank has not given any concrete instructions on whether it intends to keep hiking rates. Expectations for tapering in the United States grew after data showed a steep decline in weekly Jobless claims, while a separate reading showed producer price inflation on the rise. Tapering of stimulus measures will drive up lending rates in emerging markets, which in turn tends to make more attractive properties appear attractive. Colombia's peso fell 0.4% to the dollar, the most among its regional peers, while Mexico's peso shed 0.3%. Among Latin American stocks, Brazilian oil and gas firm Petrobras rose 1% as president Jair Bolsonaro said he was inclined to take the firm private, while also outlining possible regulations on local fuel prices. However the Bovespa index was weighed down by losses in international stocks.