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Mexican peso hits 20 per dollar for first time since Aug.

5

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Mexico's bank regulator approves stock market overhaul

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Markets still see chance of 50-basis-point Fed rate cut

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Egypt's central bank keeps rates on hold

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Latin American FX index up 0.2%, stocks up 0.3%

(Updated at 1940 GMT)

By Shashwat Chauhan and Lisa Pauline Mattackal

Sept 5 (Reuters) - Most Latin American currencies

climbed against a lackluster dollar on Thursday, as a mixed bag

of U.S. economic data ahead of a key labor market report kept

bets on a Federal Reserve interest rate cut this month intact.

The dollar slipped after data showed U.S. private

employers hired the fewest number of workers in 3-1/2 years in

August, while separate data showed services sector activity was

steady in August.

MSCI's index for Latin American currencies

rose 0.2%, while a gauge for stocks

gained 0.3%.

Investors globally have been cautious this week on signs

of slowing growth in U.S. economy, while some uncertainty

remains over how much the Federal Reserve could ease policy at

its Sept. 17-18 meeting.

The release on Friday of the U.S. employment report for

August could be key in gauging the size of the potential rate

cuts ahead of inflation data later this month. Market bets still

favor a 25-basis-point rate cut at the policy-setting Federal

Open Market Committee's meeting in two weeks, with a roughly 40%

chance of a 50-basis-point move, according to CME Group's

FedWatch Tool.

"A rate reduction at the FOMC's upcoming meeting on

September 18 looks all but certain, but the upcoming CPI report

could serve as a tiebreaker between a 25- or 50-bp cut if the

August jobs report lands in the gray zone between clearly weak

and clearly strong," Wells Fargo analysts wrote in a note.

Lower U.S. interest rates typically benefit

higher-yielding, but riskier emerging market assets and would

help relieve pressure on weakening currencies in Latin America.

Brazil's real led gains in the region, adding 1.1%

against the dollar in its best day in nearly two weeks. A

Brazilian central bank official said policymakers have taken

note of the country's stronger economic growth and currency

since their last policy meeting.

Meanwhile,

Mexico's peso slipped 0.1% to 19.9431 after briefly

touching the 20-per-dollar level for the first time in more than

a month, as jitters persisted after the lower house of Congress

approved an overhaul of the country's judiciary early on

Wednesday.

Colombia's peso appreciated 0.5%, while Chile's peso

was flat.

A Reuters poll of FX strategists showed Brazil's real will

continue to be restrained by worries about the country's fiscal

situation in the near future, while most respondents saw risks

for the Mexican peso tilted to the downside.

Local stock exchanges were broadly higher, with Brazil's

Bovespa up 0.3%. Mexican stocks lost 0.2%.

Mexico's

bank regulator

approved the terms of a stock market reform that was passed

last year, which could loosen regulations for companies to go

public, speed up the process and reduce the costs involved.

Ghana launched a

restructuring agreement

for roughly $13 billion of its international bonds.

HIGHLIGHTS

** Codelco buys Enami's 10% stake in Teck's Quebrada Blanca

mine

** Venezuela's oil exports climb to four-year high in August

** Brazil's auto production up, sales down in August

** Egypt's central bank leaves interest rates on hold

Key Latin American stock indexes and currencies:

MSCI Emerging Markets 1077.07 0.32

MSCI LatAm 2232.9 0.26

Brazil Bovespa 136554.16 0.33

Mexico IPC 51709.15 -0.2

Chile IPSA 6360.26 -0.45

Argentina Merval 1767646.3 -1.629

6

Colombia COLCAP 1341.27 0.38

Brazil real 5.5754 1.14

Mexico peso 19.9426 -0.09

Chile peso 942.59 0.01

Colombia peso 4156 0.55

Peru sol 3.7755 -0.12

Argentina peso (interbank) 953.5 0

Argentina peso (parallel) 1245 4.8192771

08