Updates with afternoon trading levels

By Purvi Agarwal

July 4 (Reuters) - Most Latin American currencies steadied on Friday as investors refrained from placing major bets with little clarity on how U.S. President Donald Trump's tariffs will be implemented as a July deadline nears.

Trump said that his administration will send letters to 10 to 12 countries on Friday, informing them of tariff rates their exports would face after the July 9 deadline.

"Countries or territories threatened with higher tariffs may experience such tariffs lasting only days or weeks," said John Raines, head of North America economics and Country Risk at S&P Global Market Intelligence.

"The (Trump) administration may back down as a result of adverse market conditions, or if it perceives that negotiations have progressed positively."

In Latin America, Mexico is among the most exposed to Trump's tariffs as other countries export less to the U.S. than they do to Asia.

This has led investors to view Latam as relatively safe, shielded from significant economic harm from Trump's sweeping duties.

MSCI's index tracking Latin American currencies .MILA00000CUS inched 0.1% lower, but was set for its fifth consecutive week of gains.

The dollar index =USD was down 0.1% on the day, still trading around multi-year lows.

Trading was expected to be thin with U.S. markets shut for the July 4 holiday.

Moreover, some concerns over the fiscal health of the U.S. remained after Congress passed Trump's tax-cut and spending package on Thursday. It is expected to add over $3 trillion to the country's $36.2 trillion debt, according to the nonpartisan Congressional Budget Office.

Mexico's peso MXN= was down 0.1% and Brazil's real BRL= slipped 0.3%.

The real was on track for its fifth week of gains, its longest win streak since February this year.

Brazil's Supreme Court Justice called a mediation hearing between the government and Congress on July 15 to address a dispute over President Luiz Inacio Lula da Silva's decree to increase tax on IOF transactions.

The administration has been trying to implement more tax rules to help maintain fiscal discipline ahead of national elections in 2026.

The currency in Chile CLP=, the world's largest copper producer, fell 0.1%, tracking prices of the red metal. MET/L

Stocks were mixed but moves were muted across the board. Mexican equities .MXX were flat, while ones in Argentina <.MERV> edged 0.2% higher. Brazil's main share index .BVSP was up 0.4%.

MSCI's Latam stocks index .MILA00000PUS was up 0.1%, headed for a weekly gain.

Elsewhere in emerging markets, Ethiopia signed a $1 billion financing agreement with the World Bank to support its economic reform program and boost growth.

Key Latin American stock indexes and currencies:

(Reporting by Purvi Agarwal and Shashwat Chauhan in Bengaluru; Editing by Emelia Sithole-Matarise and Chizu Nomiyama )

((Purvi.Agarwal@thomsonreuters.com; Shashwat.Chauhan@thomsonreuters.com))