* Brazilian real drops for third straight day * Chilean peso among few Latam FX gainers * Mexican trade surplus narrows, but export recovery gathers pace * Argentina could seek fresh funds from IMF in new deal talks (Updates prices throughout; adds comments, bullets) By Shreyashi Sanyal Oct 27 (Reuters) - Latin American currencies traded in tight spaces by Tuesday afternoon, ahead of next week"s U.S. presidential election, while Brazil"s real fell for the third straight day. The real fell 1% to touch its lowest level in 25 days, pushing the MSCI"s index for Latin American currencies 0.6% lower. Worries about the Brazilian government"s ability to fund a new fiscal program have persisted despite a reassuring tone from the country"s Economy Minister Paulo Guedes. Investors also awaited a policy meeting of Brazil"s central bank"s rate-setting committee, Copom, on Wednesday. The bank is expected to leave its benchmark Selic rate on hold at a record low of 2.00%. "Tomorrow"s monetary policy meeting was not supposed to be an especially newsworthy event. But with investors eagerly anticipating material changes in the policy guidance, including a larger-than-50% chance of a 25-basis-points increase in the policy rate at the December policy meeting," said Gustavo Rangel, chief Latin America economist at ING. Latin American currencies started the week on the back foot on Monday, but Chile"s peso rose 0.4%, extending its winning streak to an eighth day. Higher copper prices on Tuesday helped support Chile"s currency, although the focus remained on the country"s beginning the long process of drafting a new constitution after a vote in favor of the project by citizens. In Sunday"s referendum, 78% of voters in the world"s top copper producer backed constitutional overhaul, a stinging rebuke of the constitution dating from the 1973-1990 dictatorship of Augusto Pinochet. "There is the hope that this vote will mark the end of the protests and violence that has plagued the country for the past year and leaves the focus firmly fixed on broader external drivers in the short-term, such as the looming U.S. election," said Natalie Rivett, senior emerging market analyst. The U.S. dollar weakened against a basket of currencies ahead of the U.S. elections in the coming week, while fears remained of a second wave of coronavirus infections. "A Biden victory and/or "blue wave" is considered mostly positive for EM assets," IGM"s Rivett said. Mexico"s peso fell 0.1% against the dollar, with figures showing the country"s trade surplus with the rest of the world shrank in September as imports picked up faster than exports during a burgeoning recovery from the coronavirus pandemic. The Colombian peso edged 0.2% higher as oil prices regained some lost ground, while the focus remained on the country"s central bank meeting later in the week. The Argentine peso edged lower. The country could request more money from the International Monetary Fund (IMF) as part of the talks to renegotiate its 2018 standby agreement, an IMF official in Argentina said. Key Latin American stock indexes and currencies at 1917 GMT: Stock indexes Latest Daily % change MSCI Emerging Markets 1132.77 0.19 MSCI LatAm 1920.25 -1.74 Brazil Bovespa 99539.38 -1.46 Mexico IPC 38008.35 -0.62 Chile IPSA 3697.24 -0.24 Argentina MerVal 47500.05 -4.227 Colombia COLCAP 1164.18 -1.1 Currencies Latest Daily % change Brazil real 5.6742 -1.12 Mexico peso 20.9437 -0.14 Chile peso 772.3 0.35 Colombia peso 3807.6 0.14 Peru sol 3.6068 -0.08 Argentina peso (interbank) 78.3000 -0.05 Argentina peso (parallel) 177 7.34 (Reporting by Shreyashi Sanyal in Bengaluru Editing by Marguerita Choy and Jonathan Oatis)