*

Chile rate decision on tap

*

Latam stocks down 0.5%

By Shashwat Chauhan

May 23 (Reuters) - Most currencies in resources-rich

Latin America slipped on Thursday, as fresh data and hawkish

minutes from the U.S. Federal Reserve's last policy meeting kept

risk sentiment in check.

Mexico's peso slipped 0.4% in choppy trading, while

Chile's peso dipped 0.1% following a more than 2% fall in

the last session as copper prices continued to retreat.

Chile's central bank is expected to cut interest rates by at

least 50-basis points as it concludes its two-day policy meeting

on Thursday.

Data showed the Mexican economy posted slightly

better-than-expected growth of 0.3% in the first quarter,

beating estimates of 0.2% by economists in a Reuters poll.

Minutes from the Mexican central bank's last policy meeting,

where it had held rates steady at 11%, showed some governing

board members cautioned against resuming interest rate cuts as

inflation persists.

Brazil's real edged 0.1% lower, on track to extend

losses to a fourth session, while Colombia's peso slipped

0.1%.

Currency markets around the world were subdued after minutes

from the Fed's last policy meeting showed officials still had

faith that price pressures would ease at least slowly in coming

months. However, doubts emerged as to whether current interest

rates were high enough to guarantee an easing and "various"

officials said they would be willing to hike borrowing costs

again if inflation surged.

"Near-term moves when you hear incremental hawkish Fed

rhetoric or unexpected minutes that lead to the hawkish side

imply weaker moves into Latin currencies," said Malcolm Dorson,

head of emerging markets strategy at Global X.

"But bigger picture, major economies like Brazil and Mexico

still have very strong positive real rates so the carry trade is

still strong there."

Moreover, U.S. business activity accelerated to the highest

level in just over two years in May, but manufacturers said

prices surged for a range of inputs, suggesting that goods

inflation could pick up in the months ahead.

Most equities in the region were under pressure, with MSCI's

index for Latin American stocks down 0.5%

following a near 2% drop in the last session.

Brazil's main index was down 0.7%, as losses in

utilities and consumer discretionary shares weighed, while

Mexican equities lost 0.3%.

HIGHLIGHTS

** Moody's downgrades Colombia's Ecopetrol to junk status

** Turkey central bank holds rate at 50%, eyeing inflation

risk

** Peru's cenbank chief sees May annual inflation at around

2%

Key Latin American stock indexes and currencies:

Stock indexes Latest Daily % change

MSCI Emerging Markets 1091.72 -0.33

MSCI LatAm 2426.69 -0.53

Brazil Bovespa 124749.24 -0.72

Mexico IPC 56284.24 -0.26

Chile IPSA 6779.64 0.62

Argentina MerVal 1566066.02 0.206

Colombia COLCAP 1406.88 -0.17

Currencies Latest Daily % change

Brazil real 5.1510 0.06

Mexico peso 16.7220 -0.37

Chile peso 908.2 -0.09

Colombia peso 3832.81 -0.11

Peru sol 3.7447 -0.53

Argentina peso 890.0000 0.06

(interbank)

Argentina peso 1280 -0.39

(parallel)