*

Brazil services activity jumps to record high in July

*

Colombian govt proposes new fiscal reform

*

Vale bumps up 2024 iron ore production forecast, shares

rise

*

Stocks rise 0.8%, FX up 0.2%

(Updated at 1945 GMT)

By Johann M Cherian and Shubham Batra

Sept 11 (Reuters) - Mexico's peso outperformed Latin

American currencies on Wednesday after lawmakers finalized a

judicial overhaul, while regional stocks jumped after Brazil's

Vale raised its annual iron ore production forecast.

Mexico's peso traded at 19.78 per dollar and was on

track for its biggest one-day jump in nearly three weeks, with a

bounce in oil prices aiding some gains.

The country's Senate approved a sweeping reform where judges

would be elected by popular vote, a radical transformation that

has been criticized for putting the country's economy and rule

of law at risk.

The peso has logged losses of more than 14% since June - the

month when president-elect Claudia Sheinbaum voiced strong

support for the reforms immediately after securing a landslide

electoral victory.

Thierry Wizman, global FX & rates strategist at Macquarie,

said that traders are worried about not just lowered foreign

investment into Mexico, but damaged commercial relations between

the U.S. and Canada that threatens the dissolution of

U.S.-Mexico-Canada free-trade agreement.

He said the day's gains will be a brief pop and the

currency's losses sustained thus far will be permanent.

MSCI's gauge for Latin American currencies

inched 0.2% higher against the U.S. dollar as investors assessed

a U.S. inflation report ahead of the Federal Reserve's next

monetary policy meeting.

Odds favouring Democrat Kamala Harris over Republican Donald

Trump following a fierce U.S. presidential debate ahead of

November elections also aided some optimism in the region.

The former U.S. president's policies on trade, immigration

and security are seen as a negative for Latin American economies

that are mostly led by left-leaning governments.

Brazil's real edged up 0.3% after data showed service

sector activity jumped to a record high in July, cementing

expectations that the central bank will hike borrowing costs by

25 basis points at its meeting next week.

Colombia's peso reversed earlier losses to rise 0.3%

against the greenback, snapping three days of declines. The

government proposed a new fiscal reform to raise an additional

$2.84 billion through higher taxes and other measures to finance

part of next year's budget.

Concerns around fiscal instability have weighed on the

currency which is trading near 11-month lows.

Currencies of copper producers Chile and Peru

appreciated 1% and 0.7%, tracking a rebound in prices of the red

metal.

On the equities front, MSCI's index tracking regional stocks

jumped 0.8% to a nearly three-week high, with

Argentina's Merval index up 3.2%.

The country's monthly inflation rate stood at 4.2% in

August, above a Reuters forecast of 3.9% and slightly up from

4.0% in July.

Brazil's Bovespa edged up 0.3%, with miner Vale

up around 3% after the mining group raised its annual

iron ore production forecast following a stronger-than-expected

first half.

Key Latin American stock indexes and currencies:

Stock indexes Latest Daily YTD %

% change

change

MSCI Emerging 1058.91 -0.37 3.73

Markets

MSCI LatAm 2192.82 0.78 -18.29

Brazil Bovespa 134662.15 0.26 0.36

Mexico IPC 51292.65 0.63 -10.62

Chile IPSA 6301.88 1.4 1.68

Argentina MerVal 1771916.8 3.308 90.59

7

Colombia COLCAP 1314.52 0.07 9.98

Currencies Latest Daily YTD %

% change

change

Brazil real 5.6510 0.02 -41.37

Mexico peso 19.7956 1.51 -0.49

Chile peso 939.9 0.94 -34.60

Colombia peso 4260.5 0.37 -30.01

Peru sol 3.7667 0.73 -14.06

Argentina peso 957.5000 0.05 -98.06

(interbank)

Argentina peso 1265 1.19 -98.48

(parallel)