*

Trump sets 19% tariff on Indonesia goods

*

Mexico pledges action should US talks fail by August

deadline

*

Brazil could ask US for more time to negotiate tariffs, VP

says

*

MSCI Latam FX down 0.1%, stocks flat

(Updates with afternoon trading levels)

By Ragini Mathur, Purvi Agarwal and Shashwat Chauhan

July 15 (Reuters) -

Most Latin American currencies edged lower against a firm

dollar on Tuesday after U.S. inflation data suggested the

Federal Reserve would not rush to cut interest rates, while

ongoing U.S. trade negotiations kept markets cautious.

U.S. consumer prices rose at the fastest pace in five months

in June, indicating tariffs were beginning to affect inflation

and could keep the Federal Reserve on hold until September.

"As uncertainty remains high, the (Fed) may take some time

to get the clarity it is looking for," TD Securities

strategists, led by Chief U.S. Macro Strategist Oscar Munoz,

said in a note.

"While we expect the USD to get a temporary reprieve,

the bounce is unlikely to be meaningfully sustained."

The dollar index, which tracks the greenback

against a basket of currencies, climbed 0.5%, while MSCI's broad

index for Latin American currencies fell 0.1%.

U.S. President Donald Trump escalated his trade war over

the past week by imposing broad tariffs on several emerging

markets in Asia, Brazil, and Mexico, set to take effect on

August 1.

Markets, however, found some reassurance as Trump

signaled openness to negotiations, raising hopes that final

tariff levels could be reduced through diplomatic efforts.

Mexican President Claudia Sheinbaum said Mexico would

take action

if an agreement with Washington on the new tariffs is not

reached by the August 1 deadline.

The peso, one of the region's most liquid

currencies, fell 0.5%, briefly hitting a more than two-week low.

Brazilian Vice President Geraldo Alckmin said Brazil

would work to persuade the U.S. to reverse "as quickly as

possible" the 50% tariff imposed on all goods from the country

but did not rule out requesting more

time for negotiations

.

This follows news overnight that Brazilian President Luiz

Inacio Lula da Silva will sign a decree on reciprocal tariffs on

Monday, establishing the criteria for Brazil's response to

foreign trade measures impacting the economy.

The Brazilian real rose 0.5% against the dollar

in volatile trading.

Colombia's peso slipped 0.8% on low volumes.

Trump's 50-day ultimatum to Russia to end its war in Ukraine or

face sanctions weighed on oil prices, further pressuring the

peso.

The regional stocks benchmark was flat, with

Brazilian shares trading steady.

On the tariff front, Trump announced the U.S. would

impose a 19% tariff on goods from

Indonesia

under a new agreement.

Foreign investor inflows into debt markets lifted

investments

in emerging market stocks and bonds to a nine-month high of

$42.8 billion in June, according to data from the Institute of

International Finance.

HIGHLIGHTS

**

Peru's economy grows more than expected in May despite

mining dip

** India in talks with Chile, Peru to source

critical minerals, source says

** Mexico regulator fines financial institutions sanctioned

by US, local media report

Key Latin American stock indexes and currencies:

MSCI Emerging Markets 1238.36 0.8

MSCI LatAm 2263.5 0.05

Brazil Bovespa 135290.52 -0.01

Mexico IPC 56502.48 0.25

Argentina Merval 2079169.34 0.73

Chile IPSA 8139.26 -1.15

Colombia COLCAP 1692.26 0.15

Brazil real 5.5595 0.52

Mexico peso 18.832 -0.5

Chile peso 966.08 0.1

Colombia peso 4028.5 -0.82

Peru sol 3.56 0.16

Argentina peso 1259 1.67

(interbank)

Argentina peso (parallel) 1310 2.29