By Bansari Mayur Kamdar

April 3 (Reuters) - Chile's peso jumped over 1% on

Wednesday, on investor hopes of less aggressive rate easing by

the Central Bank of Chile and as prices of copper, its largest

export, rallied on optimism around demand from top consumer

China.

The peso firmed 1.2% to 962.7 per dollar at 1431

GMT.

The Central Bank of Chile cut its key interest rate by 75

basis points overnight to bring it to 6.5%, in a unanimous

decision, as the market expected.

"The pace of easing slowed this month - the Bank cut the

policy rate by 100 basis points in January - as inflation

pressures are increasing at the margin," said Andres Abadia,

chief Latam economist at Pantheon Macroeconomics.

The bank's statement also tweaked its forward guidance,

removing language from its January statement that predicted the

rate reaching its "neutral level" in the second half of 2024.

The removal of the sentence was a "hawkish development",

according to a note by Goldman Sachs economists.

The central bank on Wednesday said the Andean nation's gross

domestic product was expected to grow 2% to 3% in 2024 when

compared to the year before, up from a previous forecast of

1.25% to 2.25% growth.

Meanwhile, copper prices jumped on the back of improving

manufacturing activity in China, also lifting No. 2 copper

producer Peru's sol against the dollar.

In Brazil, data showed industrial production dipped slightly

in February from the previous month, data from statistics agency

IBGE showed on Wednesday, a worse-than-expected performance that

confirms a negative start to the year for the sector.

The real weakened 0.4% against the U.S. dollar and

has fallen 4.5% so far this year.

Market participants on Tuesday questioned the reasons behind

the decision by Brazil's central bank to intervene in the

foreign exchange market through an additional auction of swap

contracts after the local currency's recent slide against the

dollar.

Brazil's central bank chief, meanwhile, said that

policymakers have a significant concern with long-term inflation

expectations that have not converged to the official target.

Financial markets in Argentina resumed trading after a long

six-days of inactivity due to holidays and weekends, with the

Merval index falling 2.1%.

Colombia's finance ministry said it will reopen global bonds

coming due in November 2035, after issuing a first tranche of

the paper last year.

HIGHLIGHTS:

** Chile central bank cuts key rate to 6.5%

** Brazil's central bank concerned with long-term inflation

expectations

** Brazil's industrial output misses forecast in February

** Chile's central bank raises 2024 GDP growth forecast

Key Latin American stock indexes and currencies at 1431 GMT:

Stock indexes Latest Daily %

change

MSCI Emerging Markets 1042.25 -0.73

MSCI LatAm 2501.68 -0.82

Brazil Bovespa 126330.07 -0.96

Mexico IPC 57549.20 -0.06

Chile IPSA 6609.69 -0.37

Argentina MerVal 1187766.58 -2.119

Colombia COLCAP 1374.79 0.15

Currencies Latest Daily %

change

Brazil real 5.0797 -0.42

Mexico peso 16.5713 -0.13

Chile peso 962.7 1.19

Colombia peso 3811.08 0.10

Peru sol 3.6918 0.04

Argentina peso (interbank) 861.0000 -0.35

Argentina peso (parallel) 985 2.54

(Reporting by Bansari Mayur Kamdar in Bengaluru; Editing by

Emelia Sithole-Matarise)