(Updated at 1515 GMT)

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Brazil's service sector hits record high in June

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Itau Unibanco ( ITUB ) shares at all-time high

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Rouble steadies against dollar

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Latam stocks index up 0.4%

By Lisa Pauline Mattackal

Aug 13 (Reuters) - Latin American stocks and currencies

broadly rose on Tuesday amid hopes softening U.S. inflation data

that could lead to easing interest rates in the world's largest

economy, while markets in Brazil jumped after services activity

touched a record high in June.

Ahead of closely watched consumer price inflation data due

Wednesday, U.S. producer prices increased less than expected in

July which lifted hopes for a bigger interest rate cut at the

Federal Reserve's September meeting.

MSCI's index of Latin American stocks rose

0.2%, hovering at a three week high. Indexes of global emerging

market stocks and currencies gained

about 0.2% each.

Meanwhile, Brazil's real briefly touched a nearly

one-month high against the dollar, and was last up about 0.3%

after data showed the service sector rose 1.7% in June from the

month prior, beating expectations for a 0.8% rise.

Brazil's central bank governor noted that the real had

experienced "accelerated weakening," but said the central bank

has managed to drive the disinflation process with minimal

impact on economic activity.

The Bovespa index jumped 0.8% to its highest since January,

led by gains in banking stocks Itau Unibanco ( ITUB ) and

Banco Bradesco. Itau Unibanco ( ITUB ) preferred shares

touched an all-time high.

CSN Mineracao was the biggest gainer on the

index, jumping over 7% after its second quarter results.

Among other Latin American bourses, Colombia's main index

rose 0.4% and Mexican stocks jumped 0.7%.

Mexico's peso gained 0.2% against the dollar after

falling more than 1% in the previous session.

"Political developments are key risks to our constructive

long-term Mexican peso outlook, however, we remain optimistic

that worst case scenarios will be avoided and continue to

believe the Mexican peso can recover over the long-term."

The dollar weakened against most Latin American currencies

after the U.S. data. Colombia's peso was up 0.2%, and

Chile's peso rose 0.3% against the greenback.

Emerging market assets have steadily recovered from a steep

selloff last week, with worries about a slowdown in the U.S.

economy easing even as traders have increased bets on a 50 basis

point rate cut at the Fed's next meeting.

The Japanese yen has also weakened this week, helping

high-yielding currencies such as the Mexican peso which were hit

hard last Monday as crowded yen-funded carry trades unwound.

Chinese industrial output and retail sales data later in the

week will be closely watched for clues on demand growth and the

likelihood of government stimulus.

Elsewhere, the Russian rouble steadied against the

dollar after tumbling as low as 96.395 earlier in the session,

as Ukraine continued its biggest attack on Russian territory

since the war began.

HIGHLIGHTS

** China new loans hit 15-year low in July, more policy

steps expected

** Workers strike at world's largest copper mine in blow to

BHP

Key Latin American stock indexes and currencies

MSCI Emerging Markets 1071.58 0.23

MSCI LatAm 2268.05 0.42

Brazil Bovespa 132135.07 0.78

Mexico IPC 53396.31 0.67

Chile IPSA 6345.04 0.3

Argentina Merval 1579345.9 -0.602

7

Colombia COLCAP 1336.15 0.44

Currencies Latest Daily %

change

Brazil real 5.4829 0.26

Mexico peso 19.0223 0.19

Chile peso 931.44 0.31

Colombia peso 4040.31 0.24

Peru sol 3.7429 -0.4

Argentina peso (interbank) 939 0

Argentina peso (parallel) 1335 1.4981273

41