*

Mexico's annual inflation speeds up less than expected in

May

*

Chile's consumer prices up 0.3% in May, above forecasts

*

Brazil c.bank director says premature to talk about hiking

rates

*

Russian keeps rates at 16%, holds open prospect of hike

*

Latam FX, stocks poised for third weekly decline

By Ankika Biswas

June 7 (Reuters) - Most Latin American currencies

dropped on Friday, after the U.S. dollar jumped in response to

robust U.S. jobs data that prompted traders to cut bets that the

Federal Reserve will reduce interest rates by September.

The index for Latam currencies shed 0.8%, on

track for its third straight weekly decline, with the dollar

jumping 0.6% and heading for a weekly advance.

Data showed U.S. nonfarm payrolls jumped by 272,000 jobs

last month, versus 185,000 expected in a Reuters poll. After the

report, futures contracts that settle to the Fed's policy rate

implied a 53% chance of a rate cut by September, compared with

around 70% odds seen before the report.

The U.S. labor market's solid performance, despite some

recent softening, is set to see the Fed taking its time in

deciding when to begin lowering borrowing costs.

"It is a quick strong reaction that pours some cold water on

the progress Latam had made this week," said Juan Perez,

director of trading at Monex.

"It's peculiar to note that while the data lifted the

dollar, LATAM is much more resilient. Part of this has to do

with markets waking up to NFPs that have surprised before and

the central-bank-policy to derive from it as odds of cuts for

the Fed go down isn't anything drastically new."

The Brazilian real and Colombian peso fell

0.6% and 0.2%, respectively, while the Chilean peso

dropped 1.3%, also hurt by weak copper prices.

Brazil's central bank director of international affairs,

Paulo Picchetti, said it is premature to talk about potentially

hiking interest rates at the moment.

Further on the data front, top copper exporter Chile saw

exports of the red metal rise 28.1% from a year earlier, while

the country's consumer prices rose 0.3% in May and beat

expectations.

The Mexican peso was flat, on track for it's

steepest decline of over 5% since April 2020, rocked by Sunday's

landslide election victory for the ruling MORENA party and its

coalition that raised concerns around any passing of

constitutional reforms unopposed.

Data showed Mexico's annual headline inflation index rose

less than expected in May, while the core consumer price index

eased.

Meanwhile, local media reported Mexico's President-elect

Claudia Sheinbaum said no decision had been made on a package of

constitutional reforms put forward by outgoing President Andres

Manuel Lopez Obrador.

Argentina's year-end inflation estimate came down to 146.4%,

some 15 percentage points below the previous forecast, a central

bank poll showed, signaling an improving outlook for the

embattled economy.

The equities index was down 1.4%, on course

for its third straight weekly decline, dragged by Brazilian and

Mexican stocks.

Peru's stock market was closed for a public holiday.

Elsewhere, Russia held rates at 16% for the fourth meeting

running, but gave its most hawkish signal yet that a hike may be

coming in July and said tight monetary conditions would be

required for longer than previously thought.

Key Latin American stock indexes and currencies:

Stock indexes Latest Daily %

change

MSCI Emerging Markets 1072.92 -0.03

MSCI LatAm 2285.56 -1.36

Brazil Bovespa 121652.36 -1.01

Mexico IPC 54285.80 -0.35

Chile IPSA 6685.73 -0.04

Argentina MerVal 0.00 0

Colombia COLCAP 1410.52 0

Currencies Latest Daily %

change

Brazil real 5.2801 -0.59

Mexico peso 17.9740 -0.02

Chile peso 919.3 -1.29

Colombia peso 3944 -0.18

Peru sol 3.7444 0.00

Argentina peso (interbank) 898.5000 0.06

Argentina peso (parallel) 1230 1.63