*

Mexican peso weakens past 17 per dollar

*

IMF sees smaller slowdown in Latam, Caribbean region this

year

*

Brazil framework is much bigger than changes in fiscal

target,

says ministry

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Latam FX down 1.7%, stocks fall 2.4%

By Bansari Mayur Kamdar

April 16 (Reuters) - Latin American currencies were on

track for their biggest daily fall in over a year on Tuesday,

and stocks were down more than 2%, as the dollar soared on

tensions between Iran and Israel and fading hopes of a rate cut

by the U.S. Federal Reserve.

The dollar continued to rise after Monday's

hotter-than-expected U.S. retail sales data pushed Treasury

yields higher and concerns around escalating conflict in the

Middle East quashed risk appetite.

The strength of the greenback pushed the MSCI index for

Latin American currencies down 1.7% by 1430 GMT,

heading for its biggest fall since February 2023.

Latin American stocks were 2.4% lower.

Mexico's peso led the region's currencies lower with

a fall of 1.9% and briefly crossing the 17 to the dollar mark.

Juan Perez, director of trading at Monex, said the peso's

fall was partly the result of the dollar's jump to ultimate

safe-haven asset with the conflict in the Middle East reaching

an "uncomfortable point of escalation for all global markets".

"A world mostly blurred in its long-term outlooks is now

being overwhelmed with negativity and pessimism as tensions in

Russia, Ukraine, and now the Middle East seem to indicate they

are long-term headwinds to cope with."

Meanwhile, the frontrunner to win Mexico's presidential

election in June, Claudia Sheinbaum, on Monday outlined a plan

to invest $13.57 billion in new energy generation projects

through 2030.

The Brazilian real fell 1.6% versus the firmer

dollar.

Inflation in Brazil as measured by the IGP-10 price index

fell 0.33 percent in April, compared to a 0.17 percent drop in

March, according to the Getulio Vargas Foundation.

Brazil's planning minister Simone Tebet said the country's

framework for public accounts is "much bigger" than changes to

fiscal targets in response to the negative market reaction to

the relaxation of the primary result target for the coming

years.

The Bovespa index fell 0.8%, with Vale

down 1.2% after a local court again suspended the operating

license for the miner's Brazilian Sossego copper mine.

Peru's sol slipped against the dollar, while Chile's

peso and Colombia's peso lost 0.7% each.

The International Monetary Fund in its latest World Economic

Outlook upgraded its 2024 view for economic output growth in

Latin America and the Caribbean to 2.0% from its January

estimate of 1.9%, though it still expects a slowdown.

Globally, the fund said the economy is set for a yearly 3.2%

output growth, with U.S. strength offsetting headwinds from

lingering high inflation, weak demand in China and Europe, and

spillovers from two regional wars.

The broader emerging market currencies index

dipped 0.4% on Tuesday, with the Indonesian rupiah

tumbling to its weakest in four years as it reopened after the

Eid al-Fitr holidays.

Meanwhile, Sri Lanka rejected international bondholders'

proposal to restructure more than $12 billion in debt, putting

at risk critical International Monetary Fund support and

delaying its efforts to resolve a two-year-long debt crisis.

Key Latin American stock indexes and currencies at 1430 GMT:

Stock indexes Latest Daily %

change

MSCI Emerging Markets 1009.45 -2.07

MSCI LatAm 2376.29 -2.37

Brazil Bovespa 124361.23 -0.78

Mexico IPC 55802.53 -0.32

Chile IPSA 6413.57 -1.02

Argentina MerVal 1194677.2 -0.238

8

Colombia COLCAP 1379.10 -0.08

Currencies Latest Daily %

change

Brazil real 5.2701 -1.66

Mexico peso 17.0368 -1.84

Chile peso 985.5 -0.74

Colombia peso 3938.38 -0.78

Peru sol 3.7445 -0.55

Argentina peso 868.5000 0.00

(interbank)

Argentina peso 1000 1.50

(parallel)