By Walter Brandimarte RIO DE JANEIRO, May 5 (Reuters) - Latin American financial markets benefited from hopes that the U.S. Federal Reserve may take just a little longer to raise interest rates, while shares of state-run oil company Petrobras and iron ore miner Vale drove Brazil's benchmark stock index to its highest level in nearly seven months.
Shares of Petroleo Brasileiro SA, as the oil company is formally known, gained 4.6 percent on bets that Brazil may ease stringent national content rules for the oil sector as well as a 2010 law requiring Petrobras to be the operator and own a minimum 30 percent stake in all new subsalt oilfields.
Vale SA jumped nearly 8 percent, extending a rally that has been fueled by a recent rise in iron ore prices. Prices for the steel ingredient rose this week after top producer Vale said it may revise its output goal downward by up to 30 million tonnes over the next two years.
Brazil's benchmark Bovespa index rose 1.3 percent, trading above the 58,000-point level for the first time since mid-October.
Brazilian markets in general were supported by signs that President Dilma Rousseff's austerity measures, crucial to restoring investor confidence in the economy, are gaining traction in Congress.
That perception helped the Brazilian currency, the real , gain 0.6 percent after four consecutive sessions of losses.
Also supporting Latin American currencies were bets that U.S. policymakers may take a little longer to raise interest rates due to a mixed bag of economic indicators, including a wider trade deficit that suggested the world's largest economy may have contracted in the first quarter.
Colombia's peso was among the best performers in Latin American foreign exchange markets as oil prices climbed to a 2015 high, boosting prospects for dollar inflows in the oil-exporting country.
Key Latin American stock indexes and currencies at 1650 GMT: Stock indexes Latest Daily YTD pct pct change change MSCI Emerging Markets 1,047.91 -0.03 9.61 MSCI LatAm 2,729.76 1.61 -1.51 Brazil Bovespa 58,131.59 1.36 16.25 Mexico IPC 45,415.28 0.39 5.26 Chile IPSA 4,080.19 0.43 5.95 Chile IGPA 19,790.42 0.4 4.88 Argentina MerVal 12,583.319 1.91 46.68 Colombia IGBC 10,867.17 0.79 -6.60 Venezuela IBC 5,554.49 -2.48 43.95 Currencies Latest Daily YTD pct pct change change Brazil real 3.0634 0.54 -13.25 Mexico peso 15.3352 0.79 -3.86 Chile peso 609.4 0.92 -0.49 Colombia peso 2,386.99 0.88 0.04 Peru sol 3.1451 0.06 -5.28 Argentina peso 8.9150 -0.03 -4.09 (interbank) Argentina peso (parallel) 12.45 1.29 12.45 (Editing by G Crosse)