*

Mexico's annual inflation speeds up less than expected in

May

*

Chile's consumer prices up 0.3% in May, above forecasts

*

Latam FX, stocks poised for third weekly decline

(Updated at 3:52 p.m. ET/1952 GMT)

By Ankika Biswas and Shashwat Chauhan

June 7 (Reuters) - Most Latin American currencies

dropped against a firmer dollar on Friday after robust U.S. jobs

data suggested the Federal Reserve is unlikely to rush to cut

interest rates, while political worries weighed on the Mexican

peso.

The Mexican peso slid 2.3% to a eight-month low as

the outgoing president vigorously reiterated his call for a

controversial judicial overhaul that may depend on the ruling

coalition reaching a two-thirds congressional majority needed to

amend the constitution.

The Mexican currency eyed its worst weekly performance

in over four years, after Sunday's landslide election victory

for the ruling MORENA party and its coalition that raised

concerns around any passing of constitutional reforms unopposed.

"It's a bit about market uncertainty, which is quite normal.

Besides being the first female president, she has a slightly

different agenda," said Matheus Zani, head of FX risk management

at Deaglo.

"It's more like speculation ... it's normal in Latin

America this kind of market uncertainty after a presidential

election."

Local media reported Mexico's President-elect Claudia

Sheinbaum said no decision had been made on a package of

constitutional reforms put forward by outgoing President Andres

Manuel Lopez Obrador.

The Brazilian real and Colombian peso fell

1.3% and 0.1%, respectively, while the Chilean peso

dropped 1.1%, also hurt by weak copper prices.

The index for Latam currencies shed 2.1%, on

track for its third straight weekly decline, with the dollar

jumping 0.8% and heading for a weekly advance.

The U.S. economy created far more jobs than expected in May

and annual wage growth re-accelerated, underscoring the

resilience of the labor market and reducing the likelihood the

Federal Reserve will start rate cuts in September.

Further on the data front, top copper exporter Chile saw

exports of the red metal rise 28.1% from a year earlier, while

the country's consumer prices rose 0.3% in May and beat

expectations.

Argentina's year-end inflation estimate came down to 146.4%,

some 15 percentage points below the previous forecast, a central

bank poll showed, signaling an improving outlook for the

embattled economy.

The equities index was down 4.2%, on course

for its third straight weekly decline, dragged by Brazilian and

Mexican stocks.

Peru's stock market was closed for a public holiday.

HIGHLIGHTS

**

Mexico investors

worry lopsided vote could threaten rule of law

** Chile's central bank mulled 75-basis-point

rate cut

in May, minutes show

**

Brazil central bank

aligned over concern about market inflation expectations

**

Mexico's annual inflation

speeds up less than expected in May

Key Latin American stock indexes and currencies:

Latest Daily % change

MSCI Emerging Markets 1070.14 -0.29

MSCI LatAm 2220.42 -4.18

Brazil Bovespa 120925.80 -1.61

Mexico IPC 53087.99 -2.55

Chile IPSA 6633.08 -0.82

Argentina MerVal 1507533.24 0.253

Colombia COLCAP 1416.77 0.44

Currencies Latest Daily % change

Brazil real 5.3229 -1.39

Mexico peso 18.3660 -2.16

Chile peso 919 -1.26

Colombia peso 3939.66 -0.07

Peru sol 3.7369 0.20

Argentina peso 899.0000 0.00

(interbank)

Argentina peso 1245 0.40

(parallel)