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Brazil to hike rates by 25 basis points on Sept 18- Poll

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Colombia govt will not change proposed 2025 budget value

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Mexico 2nd qtr private spending down 0.6% qtr/qtr

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Argentina Q2 GDP due

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Latam FX up 0.6%, stocks up 0.2%

By Ankika Biswas

Sept 18 (Reuters) - A Latin American currencies index

hit its highest in nearly a month on Wednesday, as investors

waited to learn the size of an all-but-certain U.S. Federal

Reserve rate cut, while Brazil's real climbed ahead of a local

monetary policy decision.

The U.S. central bank is set to announce a decision at 2

p.m. EDT (1800 GMT) that will kick off a rate-cutting cycle.

Market participants have largely factored in a 50 basis

point U.S. rate cut, with such bets standing at 61%, up sharply

from a week ago, CME's FedWatch Tool showed.

Although Latam countries began easing rates long before the

Fed, lower U.S. rates could give EM central banks more scope to

ease further to support domestic growth.

Moving in the opposite direction to its peers, however,

Brazil is expected to increase its rates by 25 basis points

later in the day, marking the start of a short tightening

campaign to quash persistent inflationary trends.

The Brazilian real rose for the fifth straight

session to strengthen 0.3% against the dollar, the highest in

nearly a month.

"Brazil and particularly BRL has traded better over the last

few sessions, where we remain cautiously optimistic, with assets

exposed to legislative volatility," Citi analysts said.

"But with our expected hike today, probably enough to calm

the waters."

The MSCI index for Latam currencies rose

0.6% to its highest level since Aug. 20, with Peru's sol

rising 0.4% to a three-week high and the Colombian peso

advancing 0.2%.

Colombia's Finance Minister Ricardo Bonilla said in an

interview on Tuesday that its government will not modify the

value of $123.9 billion for its proposed 2025 budget.

Meanwhile, the Mexican peso dropped 0.5% after

briefly touching a more than three-week high in early trade,

emerging as the worst-hit Latam currency on the day.

Data showed Mexican private spending fell 0.6% during the

second quarter compared to the previous three-month period.

Chile's peso also weakened 0.2% against the dollar,

with the local equity market shut for a public holiday.

The MSCI Latam stocks index rose 0.2% to a

three-week high, even though most of the major regional stock

bourses were trading lower.

Argentina's second-quarter GDP is also due later in the day,

and is expected to show the economy has shrunk 1.4%

year-on-year, the fifth such decline as a recession deepens.

Elsewhere, Cuba's booming private businesses braced as the

island's communist-run government implemented laws aimed at more

tightly regulating the private sector amid a deepening economic

crisis.

Key Latin American stock indexes and currencies at 1415 GMT:

Equities Latest Daily % change

MSCI Emerging Markets 1088.5 -0.18

MSCI LatAm 2270.29 0.21

Brazil Bovespa 134739.86 -0.16

Mexico IPC 52342.57 0.12

Chile IPSA 6323.95 -0.36

Argentina Merval 1813297.98 0.0

Colombia COLCAP 1312.54 -0.06

Currencies Latest Daily % change

Brazil real 5.4669 0.28

Mexico peso 19.1865 -0.49

Chile peso 931.55 -0.22

Colombia peso 4199 0.17

Peru sol 3.7355 0.39

Argentina peso (interbank) 962 -0.051975052

Argentina peso (parallel) 1250 2