* Mexican peso hit 2-1/2 year highs * U.S. producer prices rise less than expected; dollar slides * Argentina agrees $5 bln China currency swap extension By Susan Mathew Nov 15 (Reuters) – Emerging market currencies rose on Tuesday as the dollar deepened losses after a smaller-than-expected rise in U.S. producer prices provided further evidence that inflation was cooling, lending weight to bets of a tempered Federal Reserve. Mexico’s peso rose 0.1% to hit over 2-1/2 year highs, while South Africa’s rand rose 0.5% having hit two-month highs. China’s yuan extended gains to a fifth session. The dollar gave up more than 1% after data showed U.S. producer prices index rose 8% in the 12 months through October, lower than an estimated 8.3% rise, and down from 8.5% in September. This comes after data last week showed U.S. consumer prices cooled more than expected in October. Hopes for a smaller 50 basis points…
