EMERGING MARKETS-Latam markets drop after strong U.S. job growth boosts dollar, commodity prices fall

* US job growth surge casts pall on rate cut bets * Turkey central bank chief resigns * Brazil's industrial production rises in December * Latam stocks down 1.2%, FX down 0.8% (Updated at 3pm ET/2000 GMT) By Amruta Khandekar and Lisa Pauline Mattackal Feb 2 (Reuters) - Stocks and currencies in resources-rich Latin America fell on Friday as a hotter-than-expected U.S. payrolls report dampened bets of early interest rate cuts, boosting the dollar and denting commodity prices. MSCI's index for Latin American currencies dropped 0.8% and a basket of regional stocks fell more than 1%. Both indexes were set for their biggest one-day percentage decline in over two weeks. The dollar jumped and Treasury yields surged after data showed U.S. jobs growth surpassed expectations in January. Traders trimmed bets of rate cuts from the Federal Reserve starting in May. At the start of the year markets had overwhelmingly priced the first cuts as early as March. The stronger dollar weighed on oil and metal prices, piling further pressure on assets in the commodity-heavy Latam region. Rate cuts in many Latin American countries including Chile and Brazil this week have also reduced the appeal of the currencies that benefit from sharp rate differentials with the United States. "Extended Fed uncertainty narrows the window of opportunity for EM (emerging markets) between the beginning of the easing cycle and the US election campaign," BofA strategists said in a note. Top copper producer Chile's peso led declines on Friday, slumping 1.7%. The Peruvian sol, the currency of another leading copper exporter, weakened to 3.8209 per dollar. The Brazilian real fell 1% against the dollar, as prices of iron ore, one of the country's biggest exports, hit a two-week low on concerns about demand from China. The Bovespa index was down 0.8%, with miners such as heavyweight Vale and financial firms among the biggest drags. Brazil's industrial production rose for a fifth consecutive month in December, surpassing pre-pandemic levels, data showed. Both Latam stocks and currencies were on course for weekly declines as pushback from the Fed against rate cuts in March and China's prolonged economic troubles steered investors away from risky assets. BofA data showed funds tracking emerging markets stocks saw strong inflows of $6.8 billion in the week to Wednesday, following a record $12.1 billion last week. MSCI's gauge of emerging market stocks was about unchanged on a weekly basis. Elsewhere Turkey's central bank governor Hafize Gaye Erkan resigned late on Friday, raising questions around the bank's aggressive tightening policies during her tenure. The lira was down 0.8% against the dollar on the day. The Mexican peso and the Colombian peso fell 0.4% and 1.2% respectively. Argentinian stocks gained 1.5%. Key Latin American stock indexes and currencies at 2000 GMT: Latest Daily % change MSCI Emerging Markets 985.61 0.36 MSCI LatAm 2535.02 -1.15 Brazil Bovespa 127425.48 -0.82 Mexico IPC 58091.48 0.46 Chile IPSA 5990.41 -1.01 Argentina MerVal 1321458.12 1.458 Colombia COLCAP 1278.53 0.07 Currencies Latest Daily % change Brazil real 4.9678 -0.04 Mexico peso 17.1420 -0.36 Chile peso 947.2 -1.71 Colombia peso 3937.32 -1.18 Peru sol 3.8209 -0.57 Argentina peso 827.3000 -0.05 (interbank) Argentina peso 1155 3.46 (parallel) (Reporting by Amruta Khandekar and Lisa Mattackal Editing by Mark Potter, David Ljunggren and Nick Zieminski)