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MSCI Latin American currencies flat, stocks fall 0.5%

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Brazil unveils aid package for exporters hit by US tariffs

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Moody's upgrades Pakistan's credit rating

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Brazil's retail sales volumes fell 0.1% in June

(Updates with afternoon levels)

By Pranav Kashyap, Purvi Agarwal and Sukriti Gupta

Aug 13 (Reuters) - Most Latin American currencies were

flat to lower on Wednesday, erasing gains from the previous

session, while equities showed mixed performance amid increased

expectations of a U.S. Federal Reserve interest rate cut next

month.

A gauge tracking the region's currencies was

little changed after hitting a record high in the previous

session, while a similar measure of stocks fell

0.5%.

Mexico's peso slipped 0.2%, and Colombia's peso

dropped 0.3%, with falling oil prices adding pressure on

the latter.

A downbeat retail sales surprise, indicating some cooldown

under high interest rates, weighed on Brazil's benchmark

equities index, set for its worst day in over two weeks.

The real weakened 0.3%.

Ning Sun, senior emerging markets strategist at State Street

Global Markets, said, "A lot of the indicators that they

(Brazil's central bank) are watching are still pointing to

overheating of the economy, so the weakness of retail sales is a

welcome sign."

"That should give them more reasons to eventually restart

the cutting cycle, but given the fiscal and tariff uncertainty,

the central bank wants to be more cautious in this cycle."

Brazil's government unveiled on Wednesday a long-awaited aid

package for companies hurt by steep U.S. tariffs.

The South American nation, a member of the BRICS bloc, has

faced mounting pressure from U.S. President Donald Trump, who

has accused the group of pursuing "anti-American policies".

Other BRICS members, including India and South Africa, are

also grappling with some of the highest U.S. tariff rates.

Most Latam currencies traded lower, reversing earlier gains

driven by optimism over a potential Federal Reserve rate cut in

September.

The sentiment followed tame U.S. inflation data released on

Tuesday and comments from Treasury Secretary Scott Bessent, who

signaled the likelihood of a 50 basis-point cut.

Emerging markets have generally performed well this month,

with assets capitalizing on growing expectations of U.S. rate

cuts, even as Trump's tariffs took effect for most trading

partners lacking a trade deal with Washington.

Chile's peso, however, climbed to its highest level

in nearly three weeks, while the country's benchmark stock index

rose 1.7% to reach a record high.

Elsewhere in Latin America, Mexican stocks fell 0.3%

on the day, while Colombian stocks edged up 0.2%,

marking their sixth consecutive session of gains.

Argentina's stock index dropped 1.6%. Data showed

annual inflation in July reached its lowest level since 2020.

Meanwhile, Trump said Ukraine must be part of territorial

talks with Russia, following a virtual meeting with European

leaders on Wednesday ahead of U.S.-Russia negotiations set for

Friday in Alaska.

Ukraine's international dollar bonds eased

slightly, after falling more than 1.2 cents earlier in the day.

Pakistan's international bonds gained as much as 1 cent on

the dollar after Moody's upgraded the country's credit rating.

Key Latin American stock indexes and currencies:

MSCI Emerging Markets 1276.77 1.55

MSCI LatAm 2342.23 -0.43

Brazil Bovespa 136651.52 -0.92

Mexico IPC 58454.35 -0.38

Chile IPSA 8733.92 1.73

Argentina Merval 2272993 -1.68

Colombia COLCAP 1828.69 0.24

Brazil real 5.4035 -0.27

Mexico peso 18.6344 -0.21

Chile peso 953.07 0.1

Colombia peso 4024.75 -0.26

Peru sol 3.5405 -0.35

Argentina peso (interbank) 1313.5 -2.93

Argentina peso (parallel) 1320 -1.89