* Chilean peso falls for third straight day * Brazilian real steadies after previous session"s surge * Petrobras CEO denies claims of "predatory" fuel pricing policy By Shreyashi Sanyal Jan 13 (Reuters) - Latin American currencies were mostly muted on Wednesday, with Chile"s peso tumbling for the third straight session as steadying U.S. Treasury yields helped support the dollar. The peso slid 2.5% in early trading against the dollar, recently coming under pressure from weaker prices of copper, the country"s main export, on demand worries as top consumer China imposed new curbs due to the spread of the coronavirus. Consensus notes that after months of anti-government protests in late 2019 and the pandemic have created fertile ground for populists in Chile, and a divided political system may make fiscal consolidation more difficult to achieve. Chileans are also gearing up to vote for its new 155-members constitutional body in April. Most other currencies in Latin America traded in a tight range against a rising dollar, even as near-term prospects for the safe-haven currency remained bearish. Brazil"s real traded 0.5% higher on Wednesday, after recording its best day since late August 2020 in the previous session. Data showed services activity in Brazil rose for a sixth consecutive month in November, more than twice as fast as analysts had expected and suggesting Latin America"s largest economy went into the year-end on strong footing. "A normalization of key rates is likely to stabilize BRL over the course of 2021 but in view of the continued negative interest rates it will not allow for a rally," said Melanie Fischinger, FX and emerging market analyst at Commerzbank. "Uncertain fiscal policy discipline and a slowing reform process could put considerable pressure on the real from time to time." Mexico"s peso was flat, while Colombia"s peso gained 0.4%. Colombia"s Bogota will impose strict two-week quarantines on six more neighborhoods starting next week, Mayor Claudia Lopez said on Tuesday, as the city moves to control a second wave of coronavirus. Among stocks in the region, Brazil"s Bovespa ticked 0.4% lower, with state-run oil giant Petroleo Brasileiro SA falling 0.2%. Roberto Castello Branco, chief executive of Petrobras, has dismissed accusations from private fuel importers that the firm is enforcing a price policy that does not reflect market dynamics. Key Latin American stock indexes and currencies at 1420 GMT: Stock indexes Latest Daily % change MSCI Emerging Markets 1360.82 0.54 MSCI LatAm 2522.36 1.17 Brazil Bovespa 123052.27 -0.76 Mexico IPC 0.00 0 Chile IPSA 4632.41 0.7 Argentina MerVal 0.00 0 Colombia COLCAP 1461.73 0 Currencies Latest Daily % change Brazil real 5.2926 0.49 Mexico peso 19.7650 0.04 Chile peso 737 -1.67 Colombia peso 3465.14 0.28 Peru sol 3.6058 0.11 Argentina peso (interbank) 85.5500 -0.09 Argentina peso (parallel) 155 2.58 (Reporting by Shreyashi Sanyal in Bengaluru Editing by Bernadette Baum)