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LatAm stocks up 0.37%; FX up 0.3%

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Chile holds interest rate at 4.75%

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Brazilian judge votes to annul Bolsonaro case

(Updates with afternoon trading)

By Pranav Kashyap and Twesha Dikshit

Sept 10 (Reuters) -

Index tracking Latin American currencies traded at record

levels on Wednesday, with the Brazilian real leading gains after

a favorable inflation print, while Chile's peso advanced

following an expected "hold" rate decision by the central bank.

A gauge linked to local currencies

touched a new peak and was last up 0.3%, while a parallel index

tracking regional stocks rose 0.37%.

The U.S. dollar remained under pressure after a

surprise fall in August producer prices solidified expectations

for a Federal Reserve interest rate cut later this month.

In Brazil, the local real jumped 0.61% after

consumer prices in Latin America's largest economy fell 0.11% in

August, slightly below estimates. The decline in inflation may

be linked to increased domestic product supply stemming from

U.S. tariffs on Brazilian goods.

The key data arrives a week before the central bank's

policy meeting. The bank kept rates steady at 15% in July - near

a 20-year peak - pausing an aggressive 450-basis-point

tightening cycle that began in September.

Steep borrowing costs aimed at taming inflation have

started to crack the domestic economy, prompting traders to

price in rate reductions by year-end.

"With inflation likely to end the year slightly below

its current level and GDP growth set to slow further, we think

the conditions will be in place for the start of an easing cycle

around the turn of the year," said Liam Peach, senior Emerging

Markets economist at Capital Economics.

Markets also tracked former President Jair Bolsonaro's case

after Supreme Court Justice Luiz Fux urged annulling the

proceedings.

In Chile, the central bank left its benchmark rate unchanged

at 4.75% in a unanimous decision, matching expectations, while

warning that stickier-than-expected core inflation warrants

close monitoring of the economy.

Stocks in Santiago dipped 0.12, while the peso

rose 0.58%. Separately, Chile's central bank nudged its

2025 GDP projection to 2.25% to 2.75%, lifting the lower end

from 2.0%.

Argentina stocks staged a comeback after a rout

earlier this week, surging nearly 5% on Wednesday. The peso

, however, remained afflicted by political

uncertainty, falling 0.5% and extending its weekly slump to 4.3%

so far.

The country's assets collapsed after a crushing defeat

for President Javier Milei's party in Sunday's Buenos Aires

provincial election at the hands of the center-left Peronists,

raising doubts about whether the libertarian president could

advance his austerity policies.

The bigger scale of loss is also seen by markets as an

indicator for October's midterm elections, leading investors to

second-guess domestic assets. Argentina's monthly

inflation rate

held steady at 1.9% in August, slightly below analysts'

forecast of 2.0%.

Mexico will

raise

tariffs on automobiles from China and other Asian countries

to 50% in a major overhaul aimed at protecting jobs, which

analysts say is also meant to placate the United States.

Mexico peso was up 0.2%, while stocks fell

about 0.4%.

The Peruvian sol added 0.3% in light volumes

ahead of its central bank rate decision on Thursday, with

markets expecting a 25-basis-point cut.

The Colombian peso traded with caution, while stocks

rose 0.3% after the government launched a tender offer

for its outstanding 3.875% 2026 global bonds.

Key Latin American stock indexes and currencies:

Stock indexes

Latest Daily % change

MSCI Emerging Markets 1306.53 0.86

MSCI LatAm 2446.04 0.35

Brazil Bovespa 142380.94 0.54

Mexico IPC 60458.18 -0.36

Chile IPSA 8974.57 -0.12

Argentina MerVal 1812390.61 4.86

Colombia COLCAP 1874.18 0.33

Currencies Latest Daily % change

Brazil real 5.4064 0.61

Mexico peso 18.588 0.23

Chile peso 961.9 0.58

Colombia peso 3924.21 -0.06

Peru sol 3.4804 0.32

Argentina peso (interbank) 1,423.5 -0.49

Argentina peso (parallel) 1,370.0 1.08