* Brazil"s real outperforms peers for the week * Chilean peso tracks sharpest weekly decline since August 2020 * Latam stocks index set to fall for the week By Shreyashi Sanyal Jan 15 (Reuters) - Brazil"s real bucked a three-day winning streak on Friday after data showed the first decline in retail sales in seven months, although the currency is set to outperform its Latin American peers for the week on improving risk sentiment. The real fell 1% against the dollar as official figures showed Brazilian retail sales surprisingly fell in November mainly driven by a sizeable fall in sales of food products. "The survey breakdown suggests that those components that were performing well during the peak of the pandemic are now contracting (food/beverages/supermarket or furniture/home appliances), while others components that were more negatively affected during that period keep recovering (apparel or cars)," Citi strategists wrote in a note. Global risk sentiment showed signs of improving early in the week, which has put the real on track to cap the week with gains of 2.6%. However, a travel ban imposed by Britain over a Brazilian variant of the coronavirus hurt the mood on Friday. The MSCI"s index for Latin American currencies was set to end the week higher, adding 1.3%. Most risky assets have gained this week on anticipation of a faster pace of global economic recovery as COVID-19 vaccines start to roll out across the world. Sentiment was also boosted by hopes of a fiscal boost from a $1.9 trillion U.S. stimulus plan. The Mexican peso fell 0.6% on Friday, but was set for its sharpest weekly gain in nearly one month on improving economic data points. Among weekly decliners, Chile"s peso led the descent to tumble over 3% for the week. Chile"s central bank announced during the week a plan to purchase $12 billion over the next 15 months to replenish and expand foreign currency reserves. However, analysts expect substantial near-term weakness in the peso, despite the intervention by Chile"s central bank. The currency dropped 1.2% in early trading. Oil-exporter Colombia"s peso fell 0.5% and was also set to drop for the week tracking losses in crude prices. Equities across emerging markets fell on Friday, with the MSCI"s index for Latin American stocks set for weekly declines of 1.6%. Key Latin American stock indexes and currencies at 1455 GMT: Stock Latest Daily % indexes change MSCI Emerging Markets 1360.58 -0.74 MSCI LatAm 2500.64 -1.81 Brazil Bovespa 121392. -1.69 76 Mexico IPC 45793.9 -0.6 3 Chile IPSA 4613.22 -0.6 Argentina MerVal 50679.7 -0.793 0 Colombia COLCAP 1457.08 -0.68 Currencies Latest Daily % change Brazil real 5.2654 -1.04 Mexico peso 19.8410 -0.68 Chile peso 735.1 -1.21 Colombia peso 3462.33 -0.52 Peru sol 3.6108 -0.06 Argentina peso (interbank) 85.7300 -0.08 Argentina peso (parallel) 155 2.58 (Reporting by Shreyashi Sanyal in Bengaluru; Editing by Angus MacSwan)