* Peru presidential race to be tight, sol volatile * Brazil"s real best weekly performer, up 3.5% * Colombian peso set for best week this year (Adds details, updates prices) By Susan Mathew and Ambar Warrick June 4 (Reuters) - Latin American currencies firmed on Friday as disappointing U.S. payrolls data dented expectations of imminent policy tightening, while the focus turned to weekend elections in Mexico and Peru. The below-expectation U.S. nonfarm payrolls data eased worries that the pace of economic rebound could fan inflation and prompt a change in U.S. monetary policy. "The data has helped calm fears that ... the Fed could start to taper support sooner," said Fiona Cincotta, senior financial markets analyst at City Index, referring to the Federal Reserve"s monthly purchase of bonds, designed to hold down interest rates and spur growth. The data hit the dollar, while U.S. stocks rallied, providing cues for stocks in Latam. The prospect of accommodative U.S. rates benefits high-yielding emerging market assets. Weekend events in Peru and Mexico will be keenly watched, with Peru choosing its president, while mid-term elections in Mexico have the capacity to determine the course of economic reforms in the country. The Mexican peso rose 1%. Fluctuations in oil prices and worries around the election pushed it around 0.4% lower for the week. Peru"s sol recovered sharply from near-record lows. Recent polls suggested that Peru"s presidential race will be tightly fought between right-wing conservative Kieko Fujimori and socialist rival Pedro Castillo, whose visions for the country stand in stark contrast to each other. "We would not be surprised if results take longer to be declared final by the electoral authority," strategists at Credit Suisse said, which could mean a prolonged period of market uncertainty. Whoever wins, the Andean country is set for a volatile and uncertain road ahead, analysts say. Colombia"s peso tracked rising oil prices to add 1.5%. On the week, the currency is up about 2.8% - its best week this year. Colombia"s government is struggling to push a watered-down tax reform through a reticent Congress. The earlier proposal had sparked violent nationwide protests and resulted in the country"s losing one of its three investment-grade ratings. Brazil"s real gained 0.7% as the country returned from a day"s holiday, rising for a seventh straight session . The real was the best performer in Latam this week, surging 3.5% on upbeat economic growth numbers and as rising inflation brewed expectations of more policy tightening. Iron ore miner Vale fell 1.9% after it interrupted production at its Timbopeba mine and part of its Alegria mine after prosecutors ordered the evacuation of an area around the nearby Xingu dam. Key Latin American stock indexes and currencies: Latest Daily % change MSCI Emerging Markets 1382.97 -0.04 MSCI LatAm 2665.65 0.51 Brazil Bovespa 129876.87 0.21 Mexico IPC 50426.44 -0.4 Chile IPSA 4196.66 -0.72 Argentina MerVal 65338.43 1.61 Colombia COLCAP 1245.35 -1.03 Currencies Latest Daily % change Brazil real 5.0470 0.70 Mexico peso 19.9443 1.05 Chile peso 717.88 0.09 Colombia peso 3601.52 1.59 Peru sol 3.84 0.78 Argentina peso 94.8600 -0.04 (interbank) (Reporting by Susan Mathew and Ambar Warrick in Bengaluru; Editing by Nick Tattersall and Leslie Adler) Our Standards: The Thomson Reuters Trust Principles.