* Brazil"s real leads gains as inflation increases * Argentine peso the sole loser * Latam stocks up in early trade By Ambar Warrick April 5 (Reuters) - Most Latin American currencies rose on Monday as the dollar retreated slightly from recent gains, while Argentina"s peso dropped after President Alberto Fernandez tested positive for COVID-19. Chile"s peso hit a more-than one-month high, while Brazil"s real led gains among its peers on waning pressure from the greenback, which retreated slightly from recent peaks after stellar U.S. payrolls data. The real also benefited from increasing inflation trends in the country, which have spurred monetary policy tightening measures by Brazil"s central bank. Still, the real has lagged its peers by a wide margin this year, as the country struggles to roll out vaccinations amid a rising death toll from COVID-19. Increased bullishness on the dollar and rising Treasury yields have also weighed on emerging market currencies this year, with those in Latam bearing the brunt of the pressure due to a damaging resurgence of the coronavirus in the region. A mild pullback in U.S. benchmark yields benefited emerging market currencies on Monday. "Our view to start the year was partly based on the enormous gap between the green and black lines, indicating that the USD was too weak relative to the global outlook," analysts at TD Securities said. "That gap has been closed, and now a new open has opened up in the other direction. It"s not huge, but we think there"s room for a USD pause in the interim." Argentina"s peso lagged its regional peers on the day after President Fernandez tested positive for the virus, although doctors called the case mild. Most Latin American stocks rose in early trade. Brazilian iron ore miner Vale was among the top boosts to the Bovespa benchmark index after it announced plans to buy back shares. Key Latin American stock indexes and currencies: Latest Daily % change MSCI Emerging Markets 1338.11 -0.01 MSCI LatAm 2317.50 1.61 Brazil Bovespa 116839.76 1.38 Mexico IPC 47574.09 0.69 Chile IPSA 4883.44 -0.04 Argentina MerVal - - Colombia COLCAP 1320.36 0.27 Currencies Latest Daily % change Brazil real 5.6490 1.15 Mexico peso 20.2600 0.17 Chile peso 713.8 0.45 Colombia peso 3642.03 0.33 Peru sol 3.7427 0.00 Argentina peso 92.2300 -0.25 (interbank) (Reporting by Ambar Warrick in Bengaluru)