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U.S. job growth slows in July, dollar tumbles

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IMF disburses $2 bln to Argentina

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El Salvador's ruling party passes election bill

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MSCI EM stocks, FX head for weekly declines

(Updates to afternoon hours)

By Ankita Yadav and Johann M Cherian

Aug 1 (Reuters) - Most Latin American currencies firmed

on Friday as the dollar tumbled after signs of a cooling U.S.

labor market complicated the Federal Reserve's policy path,

while investors also scrutinized the latest U.S. tariff

comments.

U.S. job growth slowed more than expected in July while the

prior month's figures were revised sharply lower, data showed,

indicating that the labor market could be showing signs of

stalling, adding to some hopes of an interest rate cut in

September.

"A higher likelihood of lower U.S. rates can make the dollar

relatively less attractive and that is a very favorable headwind

for Latin American currencies; we are seeing quite a bit of

relief" said Pablo Riveroll, fund manager & global head of

equities research at Schroders.

The dollar index edged down 0.9% following the data,

boosting most emerging market currencies. The MSCI index

tracking Latin America currencies was up 0.4%,

set for marginal gains this week.

Still, a recovery in the dollar this week after a

U.S.-European Union trade deal hit the euro had stalled the

momentum in emerging markets, with broader indexes tracking

developing market stocks and currencies

heading for weekly declines.

Meanwhile, investors globally were also grappling with a

fresh set of U.S. tariffs imposed on dozens of trade partners,

that will come into effect on August 7.

In Latin America, Brazil's real was up 0.8% and was

on track for its biggest one-week rise in over a month as the

country secured exemptions from 50% U.S. tariffs on key exports.

The local government expects to announce next week measures

of a contingency plan it has been preparing to help businesses

to cope with the levies.

"We're partly getting used to these deadlines that can get

extended... more relevant are the items that were exempted,

there was initially a very aggressive stance against Brazil and

now when we saw the details there were lots of key exports

exempted," said Riveroll.

On the flip side, Mexico's peso was down 0.4%, a day

after Trump extended the tariff negotiation deadline for Mexico

by 90 days, as investors priced in a potential interest rate cut

by the local central bank next week. The peso was headed for a

weekly decline, an outlier among peers.

Colombia's peso strengthened 1.2%, the most among

peers. The currency was set for a weekly gain after three weeks

of declines.

Chile's currency followed with a 0.3% gain. Economic

activity rose at an annualized 3.1% in June, data showed,

missing estimates.

Argentina's peso was up 0.9% after the

International Monetary Fund board completed its first review of

the $20 billion program with Argentina and approved a

disbursement of about $2 billion in funds. Stocks,

however, declined 1.8%.

Equities in the region were broadly lower, with ones in

Colombia and Mexico down 1.2% and 0.6%

respectively.

Meanwhile, El Salvador's dollar bonds were marginally lower

after the ruling party passed a bill to overhaul how elections

are run in the Central American nation, opening the door for

President Nayib Bukele to serve another term.

Key Latin American stock indexes and currencies:

Latin American market prices

from Reuters

MSCI Emerging Markets 1229.2 -1.13

MSCI LatAm 2226.26 -0.25

Brazil Bovespa 132639.41 -0.32

Mexico IPC 57059.07 -0.59

Chile IPSA 8174.35 -0.14

Argentina Merval 2277695.63 -1.803

Colombia COLCAP 1751.36 -1.21

Brazil real 5.5533 0.85

Mexico peso 18.9379 -0.36

Chile peso 968.78 0.32

Colombia peso 4126.43 1.22

Peru sol 3.5852 0.16

Argentina peso (interbank) 1362 0.87

Argentina peso (parallel) 1315 1.5