*

Latam stocks rise 0.54%; currencies dip 0.1%

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US private payrolls grow below expectations in August

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Brazil's trade surplus expands sharply in August

(Updates with afternoon trading)

By Pranav Kashyap, Twesha Dikshit and Nikhil Sharma

Sept 4 (Reuters) -

Latin American currencies traded cautiously against a steady

dollar on Thursday, as investors prepared for a pivotal U.S.

jobs report expected to shape expectations for a potential

interest rate cut by the Federal Reserve.

MSCI's gauge of Latin American currencies

edged down 0.1%, while its counterpart tracking

stocks reversed earlier losses to gain 0.54%.

The dollar index rose 0.15% after declining in the

prior session amid weaker U.S. private payrolls data and higher

jobless claims, suggesting labor market softness that bolstered

expectations for a September rate cut.

Attention now shifts to Friday's closely watched nonfarm

payrolls report, which could reinforce bets for a rate reduction

at the Fed's September 16-17 meeting.

The Mexican peso weakened 0.27%, while the

benchmark stock index rose 0.35%. Meanwhile, data showed

Mexican fixed investment fell more than expected, declining 1.4%

in June.

Investors monitored Argentina's peso closely ahead of local

elections in Buenos Aires on September 7 and midterm polls in

October.

The peso edged lower on Thursday and was on

course for a weekly decline, while Argentine stocks

surged 2.8%, marking their strongest single-day gain in nearly a

month.

"If you get a scenario where there is some

underperformance in the elections (by Milei), either in Buenos

Aires or in the broader midterms, that can result in a lot of

capital outflows from Argentina," said Brendan McKenna, FX

strategist with Wells Fargo Securities.

"I would expect the peso to kind of bear the brunt of

that pressure," he added.

The Treasury pledged liquidity support through

interventions aimed at stabilizing the currency, which faced a

sharp selloff last week amid corruption allegations involving

officials in President Javier Milei's administration.

Meanwhile, Brazilian equities appeared set to

end a three-day losing streak, rising 1% on Thursday, driven by

gains in commodity-linked stocks.

The real held steady after data showed the country's

trade surplus jumped 35.8% year-on-year in August, despite

pressure from steep U.S. tariffs.

The real remains the best-performing currency among its

South American counterparts this year, gaining over 13% as

dollar weakness fuels higher inflows into high-yielding emerging

market assets.

A study showed that Brazil had emerged as the

third-largest destination for Chinese investments, with projects

across several sectors attracting $4.2 billion last year.

Most Latin American benchmarks have also outperformed Wall

Street's S&P 500 index in 2025.

The Colombian peso climbed 0.5% to reach a near

seven-week high, while stocks in Bogota gained 0.74%

ahead of Friday's inflation data for Colombia.

Ecuador's 2040 dollar bond advanced 1.125

cents, following the United States' announcement of nearly $20

million in new security commitments for the country.

Among individual stocks, Brazilian planemaker Embraer ( ERJ )

rose 2.5% as it prepared to unveil a "milestone" in

Washington next week.

Key Latin American stock indexes and currencies:

Stock indexes

Latest Daily % change

MSCI Emerging Markets 1261.52 -0.43

MSCI LatAm 2410.64 0.59

Brazil Bovespa 141294.72 1.02

Mexico IPC 59856.4 0.35

Chile IPSA 9147.78 0.94

Argentina MerVal 1988627.45 2.83

Colombia COLCAP 1848.14 1.09

Currencies Latest Daily % change

Brazil real 5.4453 0.11

Mexico peso 18.7311 -0.27

Chile peso 971.83 -0.33

Colombia peso 3986 0.48

Peru sol 3.5251 0.19

Argentina peso (interbank) 1,362.5 -0.07

Argentina peso (parallel) 1,345.0 0