* Rouble bounces as traders reassess geopolitical risks

* Brazil's real firms to July 2021 highs

* EM stocks drop for fourth straight session (Recasts with Biden sanctions, updates some prices)

By Alden Bentley, Anisha Sircar and Shreyashi Sanyal

Feb 22 (Reuters) - Many emerging market currencies, including the rouble, ended firmer despite Russia threatening a possible all-out invasion of Ukraine, after U.S. President Joe Biden imposed a range of sanctions and played down prospects for U.S. military action.

Biden's first sanctions against Russian banks and elites were for what he called Moscow's beginning of an invasion of Ukraine, and he promised steeper punishments ahead if Russia continued its aggression.

The Russian rouble slid to 80.9275 against the U.S. dollar in earlier trading, touching its lowest level against the greenback since November 2020, before reversing course. The dollar was last down 1.7% against the rouble.

Russian dollar bonds extended their losses a little after the U.S. sanctions were announced, with longer-dated issues slipping to record lows trading in the mid-90s, data showed. ,.

The premium demanded by investors to hold Russian debt over safe-have U.S. Treasuries blew out to 329 basis points, the widest since the COVID-19 pandemic market rout in spring 2020.

The European Union and Britain announced similar sanctions plans, while Germany halted a major gas pipeline project from Russia, which they say has amassed more than 150,000 troops near Ukraine's borders. Moscow has denied planning an invasion.

"Our core scenario on this crisis is for tensions to stay elevated but a full-scale conflict being avoided. We continue to view this as the most likely scenario," said Charles-Henry Monchau, chief investment officer at Bank Syz in Geneva.

"We do not see any reason to panic at this stage. While most western media comments sound alarming, we might actually get close to 'peak fear' on this crisis and there is a high probability that tensions will start to abate from here on."

The MSCI's index for Latin American currencies gained 0.28% and stocks firmed 1.12%, while the wider emerging market stock index fell for a fourth straight session.

Of note, Brazil's real firmed to a near eight-month high against the dollar as it continued to entice investors with attractive rate differentials. The dollar fell 0.8% against Brazil's currency and is set to strengthen for the fourth straight month to be the best performer among its Latin American peers so far this year.

"Latin American markets will likely attract investors with higher interest rates but a less optimistic global economic recovery could disrupt the recovery," said Edward Moya, senior market analyst at OANDA.

"The Brazilian real is becoming a favorite as traders focus on surging commodity prices and interest rate differential, while overlooking the political uncertainty that is coming up with the presidential election."

Most other currencies in the region were firm, with the dollar off between 0.2% and 0.7% against the Chilean and Colombian pesos, Mexican peso and the Peruvian sol , while Argentina's pesos slipped. (Reporting by Anisha Sircar, Shreyashi Sanyal and Shashank Nayar in Bengaluru; Editing by Emelia Sithole-Matarise, Tim Ahmann & Shri Navaratnam)