* Chilean peso hits new 14-month high * Mexico to start vaccination on Thursday * Dollar weakens, supporting EM currencies By Shashank Nayar Dec 23 (Reuters) - Mexico"s peso and stocks gained on Wednesday as rising oil prices and an improving economic outlook outweighed fears about a more contagious variant of the coronavirus in Britain that roiled global markets this week. The peso and the IPC equities index snapped a three-day losing streak as prices of oil - Mexico"s top export - rose more than 1%, supported by a weaker dollar. Mexican President Andres Manuel Lopez Obrador said COVID-19 vaccinations will begin in Mexico on Thursday, starting with healthcare workers, and that he expects the economy to have recovered almost to its pre-pandemic levels by the end of the first quarter of 2021. Riskier assets jumped on Wednesday as investors looked past a last-minute intervention by U.S. President Donald Trump over pandemic relief plans and on hopes that COVID-19 vaccines will be effective against the new virus variant. "High-beta currencies are rallying against the greenback on hopes that the COVID vaccines are expected to work on the new strain of the virus," said Edward Moya, an analyst at Oanda in New York. Investors are counting on a weakening dollar - on track for its weakest year since 2017 - to boost rallies in everything from U.S. stocks to emerging markets and industrial metals in 2021. The currency of the world"s largest copper producer Chile hit a fresh 14-month high after prices of the metal pushed back towards their multi-year highs. However, Brazil"s real and the Argentine and Colombian pesos reversed early gains, although stocks in the region outperformed. The broader Latin American stocks index rose 0.4%, tracking gains in global stocks. Shares in Brazil"s state-controlled oil company Petroleo Brasileiro SA jumped 2.9% after it started the process of selling its 51% stake in the Brazil-Bolivia gas pipeline as part of a divestment programme. Key Latin American stock indexes and currencies: Latest Daily % change MSCI Emerging Markets 1257.59 0.71 MSCI LatAm 2422.58 0.44 Brazil Bovespa 117661.03 0.88 Mexico IPC 43119.35 1.22 Chile IPSA 4160.77 -0.7 Argentina MerVal 51068.58 1.313 Colombia COLCAP 1416.54 1.12 Currencies Latest Daily % change Brazil real 5.1784 -0.33 Mexico peso 20.0930 0.19 Chile peso 715 1.03 Colombia peso 3480.25 -0.50 Peru sol 3.6158 -0.11 Argentina peso (interbank) 83.3500 -0.12 (Reporting by Shashank Nayar in Bengaluru; Editing by Kirsten Donovan)