By Avinash P

June 12 (Reuters) - Latin American assets edged higher on Friday as markets cheered the prospects of a deal to end the U.S.-backed war with Iran, which boosted risk appetite globally.

A memorandum between the U.S. and Iran to halt the conflict in the Persian Gulf could be signed as soon as Sunday, a Western source told Reuters.

A deal could allay investor fears over energy-driven inflation pressures. Tehran's closure of the vital Strait of Hormuz, a key route for global energy shipping, has rattled oil markets. Oil prices eased 1.2% on Friday.

MSCI's index tracking Latin American stocks .MILA00000PUS gained 1.5%, while the corresponding currency gauge .MILA00000CUS rose 1.1%. Both indexes were headed for weekly gains.

Peruvian assets extended their gains after the nation's electoral authority began reviewing contested ballots in the country's presidential runoff election, with the initial count virtually complete and the two candidates separated by the thinnest of margins.

Conservative candidate Keiko Fujimori, who is favored by financial markets for her business-friendly program, had a slim lead over leftist rival Roberto Sanchez of about 600 votes out of 18 million.

Sanchez, who had been leading in the polls, had unnerved investors with his agenda to overhaul the mining sector and his ties to jailed former President Pedro Castillo.

"The country has some of the strongest fundamentals in LAC (Latin America and the Caribbean), and with a steadier hand at the wheel, that enhanced stability could boost investment and economic growth, and lead to credit rating upgrades, further solidifying the country's macro strength," said Geronimo Mansutti, senior Latin American credit analyst at investment research firm Tellimer.

Meanwhile, Peru's central bank held its benchmark interest rate at 4.25%, as widely expected.

Peru's stocks benchmark .MXNUAMPESCPGPE rose 1% and the sol currency PEN=PE firmed against the U.S. dollar.

Brazil's consumer inflation accelerated more than expected in May, official data showed, breaching the top of the central bank's target range for the first time since October ahead of a key rate decision next week.

The Brazilian central bank's rate-setting committee, known as Copom, eased its key Selic interest rate by 25 basis points to 14.50% at its April meeting, but left its next move open.

"The further rise in inflation last month, coming alongside fiscal support and strong growth, sets up a tricky decision for Copom next week. We think that it will pause the easing cycle," said Kimberley Sperrfechter, senior emerging markets economist at Capital Economics.

Local stocks .BVSP were flat while Brazil's real currency BRL= strengthened 0.2%.

Colombia's peso COP= weakened 0.5% after hitting its strongest level in more than five years on Thursday. The country's main stocks index .COLCAP added 0.8%. Assets in Chile and Mexico were also trading higher.

Bonds across major oil importing emerging market economies rallied on the Middle East peace deal hopes. Kenya's sovereign bonds added more than 2 cents, Tradeweb data showed.

Key Latin American stock indexes and currencies at 1448 GMT:

Latin American market prices from Reuters
Equities	Latest	Daily % change
MSCI Emerging Markets .MSCIEF	1714.87	3.03
MSCI LatAm .MILA00000PUS	3001.07	1.46
Brazil Bovespa .BVSP	171607.37	0.06
Mexico IPC .MXX	67903.9	1.38
Chile IPSA .SPIPSA	10894.3	1.42
Argentina Merval .MERV	3365253.39	0.365
Colombia COLCAP .COLCAP	2368.47	0.75
Currencies	Latest	Daily % change
Brazil real BRL=	5.0824	0.24
Mexico peso MXN=	17.1943	0.27
Chile peso CLP=	900.72	0.11
Colombia peso COP=	3497.37	-0.47
Peru sol PEN=	3.3847	0.4
Argentina peso (interbank) ARS=RASL	1431.5	0.07
Argentina peso (parallel) ARSB=	1430	0