* Brazil set for a near 9% decline in Q1 * Latam FX gains on the day as dollar weakens * Cielo soar after Brazil greenlights WhatsApp payments By Sruthi Shankar March 31 (Reuters) - Latin American currencies and stocks were on course to close out their worst quarter in a year on Wednesday as bets of a faster U.S. economic recovery lifted the dollar and a worsening coronavirus crisis in Brazil hit regional markets. The real, among the worst performing EM currencies so far this year with losses of almost 9%, rose 1.2%. Other regional peers including the the Mexican peso, the Colombian peso and the Chilean peso all rose in a reversal of this year"s trend as the dollar weakened. Hawkish signals from the central bank and recent moves by President Jair Bolsonaro to win support from allies in Congress amid criticism over his government"s handling of the pandemic supported Brazil"s markets recently. However, with the country reporting record COVID-19 deaths, its public finances and economic activity have taken a heavy toll. Data showed the number of people officially out of work in the three months to January hit its highest since comparable records began in 2012, while another set showed national debt rose to a new all-time high of 90% of GDP in February. "We maintain our worse-than-consensus fiscal scenario where total public spending surpasses the Spending Cap by BRL75 billion (1.0% of GDP) in 2021, but warn that the risks of a larger fiscal ease are increasing due to the tough Covid-19 situation," Citi analysts wrote in a note. The Chilean peso rose after the central bank on Tuesday kept its benchmark interest rate steady at 0.5%, in line with expectations. The central bank also said the economy would grow 6% to 7% in 2021, a greater expansion than previously predicted, buoyed by one of the world´s most successful vaccination drives. Still, the MSCI index of Latin American currencies was on course for a 6% drop in the first quarter, while its equities counterpart was set for a 6.5% decline - their worst quarterly losses since March 2020. Brazil"s main Bovespa index slipped after hitting a one-month high in the previous session as banks weighed. Payment processing company Cielo SA soared 6.2% after Brazil"s central bank allowed Facebook to process payments through the WhatsApp messaging service, which Cielo has a partnership with. Key Latin American stock indexes and currencies: Latest Daily % change MSCI Emerging Markets 1319.48 0 MSCI LatAm 2294.16 0.79 Brazil Bovespa 116599.45 -0.21 Mexico IPC 47393.34 -1.07 Chile IPSA 4917.82 -0.21 Argentina MerVal 48172.21 0.17 Colombia COLCAP 1325.28 -0.15 Currencies Latest Daily % change Brazil real 5.6885 1.22 Mexico peso 20.4400 0.64 Chile peso 719.5 1.25 Colombia peso 3671.25 1.53 Peru sol 3.7628 0.21 Argentina peso (interbank) 91.9800 -0.02 (Reporting by Sruthi Shankar in Bengaluru Editing by Alistair Bell)