(Updated at 1500 GMT)

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Fed's Powell says 'time has come' to cut rates

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Mexican peso leads regional FX advance

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Argentina's Merval index top gainer among stocks

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Stocks up 1.4%, FX adds 0.9%

By Shubham Batra

Aug 23 (Reuters) - Latin American assets jumped on

Friday after Federal Reserve Chair Jerome Powell offered an

explicit endorsement of interest rate cuts, pushing the dollar

to fresh 2024 lows.

MSCI's gauge for Latin American equities

advanced 1.4% and the gauge for region's currencies

rose 0.9%, on track to record their best day

since Aug. 9. Both the indexes, however, were set to clock

weekly losses.

Fed's Powell said "the time has come" for the U.S. central

bank to cut interest rates as rising risks to the job market

left no room for further weakness and inflation was in reach of

the Fed's 2% target.

Traders expect a quarter-point rate cut in September, but

increased bets for a bigger cut after Powell's remarks. Fed

funds futures are now pricing in a 33% chance of a 50-bp cut

next month, up from about 25% late on Thursday.

"Powell has rung the bell for the start of the cutting

cycle. The Fed now have strong confidence about inflation's path

forward - it is time to shift to the other side of the dual

mandate, and labor market risks now have their full attention,"

said Seema Shah, chief global strategist at Principal Asset

Management.

The Mexican peso and Brazilian real led

gains among currencies, rising 2.2% and 1.6% respectively as oil

prices rallied on a softer dollar, benefitting the two largest

producers of the commodity in the region.

The Mexican peso was also on track to record its best day

since June 2020.

A top U.S. diplomat said that the proposed reform of

Mexico's

judiciary threatens

the country's democracy and its vital trade relationship

with the United State, while his Canadian counterpart warned of

investor worries.

Among other currencies, the Chilean peso and

Colombian peso rose over 1% each against the greenback,

while the Peruvian sol climbed 0.8%.

On the equities front, Argentina's Merval index led

the gains for regional stocks with a near 2% increase, followed

by Brazil's Bovespa, which rose 0.8%.

Brazilian miner Samarco , which is a joint

venture between mining giants Vale and BHP,

expects to

reach 60% of its output capacity

by the end of 2024, bringing forward a previous timeline.

It has continued to resume activities after halting operations

due to a deadly 2015 tailings dam collapse.

South Africa's gold miner Gold Fields fell 8.4%

after it lowered its annual output forecast on Friday for the

second time this year after unusually harsh winter conditions

hobbled a planned ramp-up of production at a new mine in Chile.

Key Latin American stock indexes and currencies at 1500 GMT:

Stock indexes Latest Daily YTD %

% change

change

MSCI Emerging 1102.52 0.14 7.45

Markets

MSCI LatAm 2302.16 1.75 -15.03

Brazil Bovespa 136284.0 0.82 1.56

9

Mexico IPC 53441.30 0.23 -6.87

Chile IPSA 6503.97 0.43 4.94

Argentina MerVal 1602176. 1.569 72.33

92

Colombia COLCAP 1335.80 0.06 11.76

Currencies Latest Daily YTD %

% change

change

Brazil real 5.5005 1.62 -39.76

Mexico peso 19.0970 2.19 3.15

Chile peso 910 1.04 -32.46

Colombia peso 4019.5 1.31 -25.81

Peru sol 3.7395 -0.22 -13.44

Argentina peso 945.0000 0.05 -98.03

(interbank)

Argentina peso 1330 1.50 -98.55

(parallel)