*

Consumer prices in Brazil up by less than expected in

March

*

Chile to cut interest rate to 6% at next meeting, poll

suggests

*

Latam currencies fall 1.0%, EM currencies off 0.3%

By Bansari Mayur Kamdar

April 10 (Reuters) - Currencies in Latin America fell on

Wednesday, tracking the global risk-off mood and as the dollar

rallied after a stronger-than-expected U.S. inflation print

tempered hopes for interest-rate cuts in the world's largest

economy.

The MSCI index for Latin American currencies

shed 1.0%.

The dollar index, which measures the greenback

against six rivals, jumped 0.9%, as traders slashed bets the Fed

will cut interest rates in June after the U.S. Consumer Price

Index (CPI) rose 0.4% on a monthly basis in March, compared with

the 0.3% increase.

"Should the Fed get backed into a corner and hold rates

steady longer than expected, we should expect some volatility in

the currency markets," said Jeffrey Roach, chief economist for

LPL Financial.

Chile's peso shed 1.7% against the dollar, leading

losses in the region.

Chile's central bank is expected to lower its benchmark

interest rate by 50 basis points to 6% at its next meeting at

the end of May, according to a poll of analysts released by the

monetary authority.

The carry trade, which involves borrowing in a low interest

rate currency to invest in a higher yielding one, has been

effective for years and has particularly benefited currencies in

Latin America, but its strength is waning as some regional

central banks start to cut rates.

Analysts in a Reuters poll last week said the narrowing in

interest rate gaps between emerging markets and developed

markets would weaken currencies in the developing world.

Colombia's peso fell 1.2% against the greenback and

was on track for its worst daily performance since January,

while the Brazilian real slid 1.1% against the dollar.

Data showed consumer prices in Brazil as measured by the

benchmark IPCA index, rose less than expected in March, with

12-month inflation dropping below 4% for the first time since

the middle of last year.

Brazil's energy minister Alexandre Silveira said on Tuesday

that he respects Petrobras' Chief Executive Jean Paul

Prates, and that any decision regarding the CEO is to be made by

Brazil's President Luiz Inacio Lula da Silva.

Stocks in Brazil fell 0.6%, while the broader Latam

shares index slid 1.4%.

The broader emerging market stocks index pared

early gains after the U.S. CPI data and inched slightly higher,

while emerging market currencies eased 0.3%.

Fitch cut its outlook on China's sovereign credit rating to

negative, citing risks to public finances as the economy faces

increasing uncertainty in its shift to new growth models.

HIGHLIGHTS:

** South Korea opposition set for big win in legislative

election in blow to Yoon

** Czech inflation stays at 2% target

** Thai central bank holds key rate, defies government calls

for cuts

Key Latin American stock indexes and currencies at 1412 GMT:

Stock indexes Latest Daily %

change

MSCI Emerging Markets 1056.36 0.09

MSCI LatAm 2548.29 -1.44

Brazil Bovespa 129180.61 -0.55

Mexico IPC 57180.41 -0.68

Chile IPSA 6681.67 0.18

Argentina MerVal 0.00 0

Colombia COLCAP 1424.17 1.11

Currencies Latest Daily %

change

Brazil real 5.0627 -1.12

Mexico peso 16.4533 -0.43

Chile peso 958 -1.78

Colombia peso 3812.38 -1.12

Peru sol 3.7062 -0.72

Argentina peso (interbank) 865.0000 0.00

Argentina peso (parallel) 980 0.51