Dec 8 (Reuters) - Brazil"s real rallied on Wednesday ahead of a widely anticipated interest rate hike by the central bank, while easing fears about the spread of the Omicron variant supported sentiment broadly in emerging markets. The real , was up 1.4% after gaining more than 1% in the previous session, with the central bank set to hike its key interest rate by at least 150 basis points later in the day to 9.25% in order to curb rising inflation pressures. Data on Wednesday showed the country"s retail sales fell in October for the third consecutive month, as surging inflation eroded consumer purchasing power in Latin America"s largest economy. "Given the deterioration in the current and expected inflation backdrop, we expect the forward guidance to likely indicate a hike of the same magnitude at the Feb. 2, 2022 meeting," Goldman Sachs analysts wrote in a note. "But the monetary policy committee may also elect to keep optionality by simply signaling the intent to drive the policy rate further into restrictive territory but without explicitly signaling the magnitude of the early 2022 move given the unsettled growth and inflation dynamics and uncertain COVID backdrop." Brazil"s currency has dropped about 12% from its 2021 peak due to rising inflation, coronaviurus threats and uncertainty around fiscal stability. Economy Minister Paulo Guedes said on Tuesday that 2022 will be "a tough year" for Brazil amid high inflation and a sharp deceleration in economic growth, but he dismissed concerns about the country"s fiscal sustainability. read more Broader emerging markets rose as investors were relieved by early data showing that a three-shot course of the Pfizer Inc (PFE.N) and BioNTech COVID-19 vaccine was effective against the new Omicron variant. read more Oil exporter Mexico"s peso added 0.4% as crude prices gained to hover below the $76 a barrel mark. Bank of Mexico said it remained ready to take required action to promote the stability of the financial system, and that a rebound in the Mexican economy should continue into 2022. read more The bank has raised interest rates several times this year to curb rising inflation. read more While fears about Omicron appeared to be receding, the attractiveness of emerging market assets continued to waver against the possibility of higher U.S. interest rates, as the Federal Reserve prepares to begin tightening policy next year. Mexican shares (.MXX) slipped 0.1%, while Brazil"s main stock index (.BVSP) extended gains to a fifth straight session led by industrial and energy stocks. Markets in Chile, Argentina, Peru and Colombia were closed on Wednesday.