By Niket Nishant

Dec 4 (Reuters) - Latin American currencies extended gains on Thursday after notching their longest winning streak since April, highlighting the support from growing expectations that the U.S. Federal Reserve will begin lowering interest rates soon.

After trading in a tight range through the second half of last month, the MSCI index for regional currencies .MILA00000CUS has strengthened as bets on Fed easing have risen.

Lower U.S. rates typically weaken the dollar and spur demand for higher-yielding assets, including many Latin American currencies.

The currencies index gained 0.1% on Thursday and is up 0.8% for the month. The corresponding gauge for equities .MILA00000PUS climbed 0.7%.

Although December is usually a subdued period for markets, investors have been juggling several factors, including shifting rate-cut expectations, persistent geopolitical tensions in Ukraine despite diplomatic efforts and a series of local political and economic developments.

In Latin America, attention is focused on an increasingly contentious presidential race in Honduras between conservative candidate Nasry Asfura, backed by U.S. President Donald Trump, and centrist rival Salvador Nasralla.

Honduran dollar‑denominated bonds were little changed on Thursday.

BRAZILIAN EQUITIES HIT RECORD HIGH

Brazil's Bovespa .BVSP rose 1.4% and surpassed 162,000 points for the first time ever after data showed that the economy slowed more than expected in the third quarter, boosting expectations of rate cuts early next year.

The real BRL= was up 0.3% against the dollar, heading for its third straight day of gains.

"Emerging markets used to be distinguished from developed markets by their greater political risk, lower macroeconomic policy credibility, and, in recent years, less exposure in equity markets to AI tech," said Hasnain Malik, EM equity and geopolitics strategist at Tellimer Research.

"Those deficits are shrinking, particularly relative to the increasingly less exceptional U.S., and this drives much of the relative investment case in emerging markets."

Chile's main stock index .SPIPSA was down 0.1%, while the local peso CLP= rose 0.2%. Ratings agency Moody's said on Wednesday the country's divided Congress will limit the agenda of either presidential candidate who comes out on top after the December 14 runoff, supporting the country's sovereign credit quality.

Mexican equities .MXX and the peso MXN= were flat. Trump could decide next year to withdraw from the United States-Mexico-Canada trade agreement, Politico reported, citing U.S. Trade Representative Jamieson Greer.

In Argentina, equities .MERV jumped 1.6%. The peso ARS=RASL rose 0.24%, while most dollar bonds were slightly higher.

Argentine officials are starting to prepare the country's return to international bond markets by the start of 2026, Bloomberg News reported on Wednesday, citing people familiar with the matter.

Colombian stocks .COLCAP added 0.22% and the peso COP= was up against the greenback.

Additionally, investors are monitoring developments in Venezuela amid aggressive rhetoric between Trump and Venezuelan President Nicolas Maduro.

U.S. pressure on Venezuela has been building, including strikes against alleged drug-smuggling boats and threats of military action.

Key Latin American stock indexes and currencies:

(Reporting by Niket Nishant in BengaluruEditing by Nick Zieminski)

((Niket.Nishant@thomsonreuters.com;))