*

Petrobras slumps after its CEO to step down

*

US CPI rises 3.4% year-on-year

*

Latam stocks down 0.1%, FX up 0.2%

By Shashwat Chauhan

May 15 (Reuters) - Most Latin American currencies rose

against a softer dollar on Wednesday as latest U.S. inflation

data boosted hopes that Federal Reserve could cut interest rates

this year, while worries at state-run oil giant Petrobras

weighed on Brazilian markets.

Brazil's real shed 0.2% against the dollar amid

sliding iron ore prices, while the local stock index

dropped close to 1%.

Shares of state-run oil firm Petrobras slid over

6% after the company said its chief executive would step down,

to be replaced by a former regulator with views closer those of

President Luiz Inacio Lula da Silva.

Separately, Brazil's economy exhibited a

higher-than-expected contraction in March but still managed to

clinch a positive performance in the first quarter, central bank

data showed.

The Mexican peso appreciated 0.7% as the greenback

lost strength after data showed U.S. consumer prices increased

less than expected in April, suggesting that inflation resumed

its downward trend at the start of the second quarter in a boost

to financial market expectations for a September interest rate

cut by the Fed.

"This morning's in-line CPI print should assuage near-term

fears that inflation has been re-accelerating after string of

hotter prints in the first quarter," said Josh Jamner,

investment strategy analyst at ClearBridge Investments.

"While the Fed will want to see further data showing that

inflation has resumed its drift lower before gaining confidence

that they can lower interest rates, today's print should begin

to shift the narrative back towards "when" the Fed will cut in

2024 rather than "if" they will cut."

Colombia's peso also gained 0.4% in light trading.

Surging copper prices helped top producer of the commodity

Chile's peso rise 0.5% against the dollar, while Peru's

sol inched 0.1% up in choppy trading.

As of 10:50 a.m. ET (1450 GMT), MSCI's index for Latin

American currencies rose 0.2%, while a gauge for

stocks eased 0.1%.

Equities in Mexico, Chile and Colombia

advanced between 0.2% - 0.8%.

Argentina's main stock index rose over 1% a day

after its central bank cut the benchmark interest rate after

inflation slowed for the fourth straight month and the annual

rate crested just shy of 300%.

HIGHLIGHTS

** Slovak PM Fico in life-threatening condition after

assassination attempt

** Brazil's central bank fully committed to 3% inflation

target, governor says

Key Latin American stock indexes and currencies:

Stock indexes Latest Daily %

change

MSCI Emerging Markets 1086.53 0.52

MSCI LatAm 2490.99 -0.09

Brazil Bovespa 127385.04 -0.88

Mexico IPC 57678.81 0.78

Chile IPSA 6747.31 0.28

Colombia COLCAP 1408.25 0.39

Currencies Latest Daily %

change

Brazil real 5.1388 -0.19

Mexico peso 16.7136 0.71

Chile peso 909.6 0.47

Colombia peso 3829 0.33

Peru sol 3.6975 0.22

Argentina peso 885.5000 0.00

(interbank)

Argentina peso 1055 1.42

(parallel)