*

Mexican economy grows 1.4% in February from January

*

Brazil's Campos Neto indicates BCB may slow pace of rate

hikes

*

(Updated at 3:45pm ET/1945 GMT)

By Bansari Mayur Kamdar

April 22 (Reuters) - The Mexican peso kicked off the

week lower on Monday as a strong dollar continued to roil the

South American currency, but Brazil's real jumped as its central

bank hinted at slowing the pace of interest rate cuts.

The peso slipped 0.3% to 17.1386 against the

greenback, hovering around levels last seen in February.

The currency fell 2.8% last week to its lowest since

October, dragged down by growing Middle East tensions and

worries about the timeline for U.S. monetary policy easing.

Meanwhile, data showed Mexico's economy grew 1.4% in

February from January and expanded 4.4% from February of 2023.

"This is a solid report; the underlying trend is

stabilizing, following a poor performance in Q4 and January, and

we expect further good news in the near term," said Andres

Abadia, chief Latam economist at Pantheon Macroeconomics.

"The recent MXN sell-off likely will force Banxico to stay

on the sidelines next month."

However,

Brazil's

real jumped 0.6% after central bank Governor Roberto

Campos Neto reiterated that significant uncertainties made it

difficult to provide guidance on monetary policy, and hinted the

bank may not cut rates by 50 basis points as previously

expected.

JPMorgan

cut its estimate for Brazil's next rate cut to 25 bps,

citing tighter global financial conditions and Brazilian

government's reduction of its primary fiscal target for 2025,

the bank said in a note.

"Considering that the current SELIC rate is already at

10.75% and that the global and domestic uncertainties have

increased, we now look for three 25 (basis-point) back-to-back

cuts in the next meetings, with a terminal SELIC of 10%,"

JPMorgan said in a research note.

A shift to more hawkish policy expectations from the

Federal Reserve has boosted the dollar and U.S. Treasury yields,

pressuring emerging market policymakers looking to stimulate

economic growth by reducing borrowing costs.

Latin American stocks broadly rose, with MSCI's basket

of regional equities rising 1.3%. Argentina's

Merval leapt over 6.7%.

A strong dollar also weighed on other regional currencies,

with Colombia's peso falling 0.2% against the dollar and

Peru's sol dipping 0.6%.

Brazil's government formalized permission for the

central bank to offer

swaps

in longer terms, part of President Luiz Inacio Lula da

Silva's efforts to attract more investors by promoting a market

for longer-term investment hedges.

Ukraine's government bonds slipped as concern about the

ongoing war and debt-restructuring wiped out initial investor

relief over the approval of a $61 billion U.S. aid package.

HIGHLIGHTS:

** Ghana finance minister expects MoU with bilateral

lenders in May

** Pemex's debt with suppliers rose 17.3% in March to reach

163.2 billion pesos ($9.53 billion)

**

POLL-Mexico economy to keep growing steadily after June

presidential vote

Key Latin American stock indexes and currencies at 1945 GMT:

Latest Daily % change

MSCI Emerging Markets 1004.17 0.82

MSCI LatAm 2431.16 1.32

Brazil Bovespa 125563.55 0.35

Mexico IPC 56395.94 0.95

Chile IPSA 6359.10 -0.11

Argentina MerVal 1189209.83 6.722

Colombia COLCAP 1346.31 1.06

Currencies Latest Daily % change

Brazil real 5.1715 0.52

Mexico peso 17.1386 -0.33

Chile peso 952 0.15

Colombia peso 3912.07 -0.19

Peru sol 3.6908 -0.56

Argentina peso (interbank) 872.0000 -0.06

Argentina peso (parallel) 1015 0.00

(Reporting by Bansari Mayur Kamdar in Bengaluru; Editing by

Emelia Sithole-Matarise)