* Mexican peso falls as much as 0.4% * Brazil holiday keeps trading volumes low * Latam stocks lag EM peers By Ambar Warrick Jan 25 (Reuters) - Latin American currencies weakened against the dollar on Monday as a spike in regional COVID-19 cases hurt appetite for risk-driven assets, with the focus turning to Mexico after President Andres Manuel Lopez Obrador tested positive for the virus. Mexico"s peso dropped as much as 0.4% after the news on Sunday, which came after the country"s worst weekly toll from the pandemic. While the country has been racing to kick-start a vaccine program, its hospitals are operating at near full capacity in the face of record-high infection spreads. Still, data showed Mexico"s economy grew 0.9% in November from October. The figure pointed to some strength in the Mexican economy, with analysts positing a sustained recovery this year. "Following the record-breaking 18.0% year-on-year contraction in 1H2020, the economy recovered a significant part of the losses in 2H2020. The recovery is expected to continue in 2021," Goldman Sachs analysts wrote in a note. "We expect real GDP to contract 8.3% in 2020 (adding to the 0.1% decline in 2019) and to grow 3.8% in 2021, with the growth momentum skewed towards 2H2021." Weakness in crude markets weighed on commodity-reliant currencies, with Colombia"s peso dropping about 0.6% to the dollar. Concerns over fiscal spending and mismanagement of the pandemic have sullied the outlook for Latam currencies this year, with most units trading negative so far. They have also lagged their broader emerging market peers. Chile"s peso fell about 0.6%, despite a gain in the price of copper, the country"s largest export. A poll last week saw traders positioning for record-low interest rates in the country through this year. Latam stocks retreated for the day, falling about 0.2%. They have also lagged their broader emerging market peers so far this year, due to waning demand for Latam risk assets. Brazilian markets were closed for a holiday. Key Latin American stock indexes and currencies: Latest Daily % change MSCI Emerging Markets 1408.02 1.09 MSCI LatAm 2363.33 -0.2 Mexico IPC - - Chile IPSA 4527.64 1.04 Argentina MerVal - - Colombia COLCAP 1418.98 - Currencies Latest Daily % change Mexico peso 20.0367 -0.37 Chile peso 731.9 -0.53 Colombia peso 3552.28 -0.75 Peru sol 3.6338 0.00 Argentina peso 86.9000 -0.38 (interbank) (Reporting by Ambar Warrick in Bengaluru; Editing by Andrea Ricci)