March 18 (Reuters) - Latin American currencies weakened

on Monday as the dollar firmed amid concerns the Federal Reserve

will keep interest rates higher for longer, though stock markets

in the region got a lift from rising commodity prices following

upbeat China data.

The Brazilian real weakened past 5 per dollar for the

first time since Feb. 5 ahead of a domestic interest rate

decision too. The Mexican peso and the Peruvian sol

dipped around half a percent each.

Focus will be on the Fed's policy decision on Wednesday

after hotter-than-expected readings on U.S. inflation and the

labor market in recent weeks led investors to rein in bets of

big and quick interest rate cuts.

"Powell must reinforce that it is necessary to achieve

higher confidence in price stabilization to start a cycle of

interest rate cuts," analysts at StoneX said, referring to

Federal Reserve Chair Jerome Powell.

"If these expectations are confirmed, investors' risk

appetite will likely decrease, and the U.S. currency will

strengthen against other currencies."

Meanwhile, Brazil's central bank is set to ease borrowing

costs by another 50 basis points on Wednesday, a Reuters poll

showed, a move that would leave the benchmark Selic rate 3

percentage points below a six-year high of 13.75%.

Brazil's main Bovespa stock index slipped 0.3%.

Embraer ( ERJ ) fell 2% after the planemaker said it

"continues to face challenges in the supply chain."

Miner Vale climbed 1.4% as iron ore prices

rebounded after upbeat data in top consumer China renewed hopes

for a pick-up in steel demand in coming weeks.

Argentina's Merval index added 0.9% to lead gains in

the region.

Argentina's Economy Minister Luis Caputo said on Friday the

country logged a primary fiscal surplus of 1.23 trillion

Argentine pesos ($1.45 billion) in February, marking the second

consecutive month in the black after years of regular deficits.

Chile's stock market edged up 0.2% as prices of

copper, the country's principal export, hit 11-month highs

following above consensus industrial production data from China.

Chile's economy experienced a slight expansion of 0.1% in

the fourth quarter of 2023 compared to the previous quarter,

data showed, a figure slightly below market consensus.

Key Latin American stock indexes and currencies:

Latest Daily %

change

MSCI Emerging Markets 1037.69 0.29

MSCI LatAm 2489.02 -0.75

Brazil Bovespa 126351.45 -0.31

Mexico IPC 56228.40 0.3

Chile IPSA 6473.55 0.15

Argentina MerVal 1079172.38 0.95

Colombia COLCAP 1295.53 0.81

Currencies Latest Daily %

change

Brazil real 5.0258 -0.56

Mexico peso 16.7882 -0.57

Chile peso 945.5 -0.38

Colombia peso 3876.7 0.02

Peru sol 3.6942 -0.52

Argentina peso (interbank) 852.0000 -0.12