(Updated at 10:33 a.m. ET/ 1433 GMT)

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Brazilian real hits three-week low

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Brazil's Azul slides on report co eyeing options to rework

debt

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Latam FX down 2.1%, stocks down 2.4%

By Shashwat Chauhan

Aug 29 (Reuters) - Most Latin American currencies

slipped against the dollar on Thursday, as the U.S currency

firmed after data indicated that the world's largest economy

might avoid a recession, with Brazil's real the worst hit.

The dollar index perked up after data showed the U.S.

economy grew faster than initially thought in the second quarter

amid strong consumer spending, while weekly jobless claims

slipped last week.

"While it's encouraging to see less evidence of a recession,

today's numbers potentially argue against the idea of continuous

rate cuts by the Fed," David Russell, global head of market

strategy at TradeStation said.

Markets are all but convinced that the U.S. Federal Reserve

will its monetary policy when it meets in September following

Chair Jerome Powell's dovish pivot last week.

The Fed's preferred inflation measure - the personal

consumption expenditures (PCE) index - due on Friday - could

offer hints on the size of potential rate cuts.

Brazil's real led losses in the region with a 1.7%

drop, touching three-week lows, while Chile's peso shed

0.8%.

Chile's central bank is expected to lower its benchmark

interest rate to 5.50% at its next monetary policy meeting in

September, a poll of traders released by the bank showed.

Colombia's peso also slipped 0.8% to hit more than a

three-week low against the dollar, while Peru's sol

dipped 0.6%.

The Mexican peso weakened 1.5%, resuming its string

of losses this week after a small uptick in the last session.

Mexico's currency has come under pressure as investors grew

wary after lawmakers pushed forward with a controversial

judicial reform, which calls for the popular election of over

7,000 judges and magistrates, including Supreme Court justices.

MSCI's index for Latin American currencies

slipped 2.1%, while a gauge for stocks dropped

2.4%.

The benchmark index of regional heavyweight Brazil

dipped 0.6%, while shares in Colombia shed 0.2%.

Shares of Brazilian airline Azul dropped more

than 20% in early trade following a media report that the

company is considering options to rework its debt.

HIGHLIGHTS

** Chile unemployment rate hits 8.7% in quarter through July

** Ghana to launch debt exchange in coming days

** Brazil bank lending edge up in July due to household

borrowing

Key Latin American stock indexes and currencies:

Equities Latest Daily % change

MSCI Emerging Markets 1094.53 -0.25

MSCI LatAm 2224.99 -2.43

Brazil Bovespa 136568.84 -0.56

Mexico IPC 52671.51 0.44

Chile IPSA 6411.33 0.4

Argentina Merval 1641221.7 1.464

4

Colombia COLCAP 1339.75 -0.24

Currencies Latest Daily % change

Brazil real 5.6586 -1.69

Mexico peso 19.9349 -1.5

Chile peso 919.6 -0.77

Colombia peso 4130.01 -0.76

Peru sol 3.7467 -0.62

Argentina peso (interbank) 949 0

Argentina peso (parallel) 1305 2.298850575