*

MSCI Latam stocks, FX indexes set for weekly declines

*

Brazil's industrial output rises more than expected in

Sept

*

IMF sees Mexico's economic growth slowing to 1.5% this

year

*

Argentina's central bank trims rates to 35%

*

MSCI Latam stocks index down 1.9%, FX down 1.2%

(Updated at 4:00 p.m. ET)

By Johann M Cherian and Ankika Biswas

Nov 1 (Reuters) - A Latin American currencies index

slumped to a three-month low on Friday, led by Brazil's real

amid domestic economic woes and uncertainty around U.S.

elections, while Argentina's surprise interest-rate cut pushed

its main stock index to a record high.

MSCI's index tracking Latam currencies lost

1.2% against the dollar, set for weekly losses.

Brazil's real lost 1.4% to hit its lowest level since

March 2021 as investors priced in the possibility that the

country's government would not be able to meet its annual fiscal

framework.

A report said the Brazilian government is now unlikely to

present spending cut measures anticipated next week.

Better-than-expected industrial production data for

September underscored expectations of increased monetary

tightening by the central bank at its meeting next week;

however, it did little to support the currency.

Mexico's peso was also down 1.2% at its lowest level

since September 2022, trading above 20-to-the-dollar, with

analysts highlighting the peso to be the most sensitive among

regional currencies to the U.S. election outcome on Tuesday.

Some investors have increasingly bet that Republican

candidate Donald Trump will win, although he is still neck and

neck with Democratic Vice President Kamala Harris in several

opinion polls.

The former president has threatened 200% tariffs on auto

exports from Latin America's second-largest economy and his

policies are perceived by analysts to be inflationary.

"From the tariff side of things, it will strengthen the U.S.

dollar and hurt foreign direct investment into the Latam

region," Albie Manderson, Deaglo's FX Specialist said.

"Eighty percent of the goods produced in Mexico are imported

into the U.S. so tariffs are likely to impact trading

relationships. That being said, 60% tariffs on China is likely

to be a great opportunity to prop Mexico up in terms of the

whole 'near shoring' effect."

The peso also likely weakened by the International Monetary

Fund estimating Mexico's economic growth will slow to around

1.5% this year before dipping to just 1.3% in 2025.

The currency's depreciation also saw

remittances sent to Mexico

recording their largest annual drop in eleven years in

September.

Meanwhile, Argentina's central bank

cut its benchmark interest rate

to 35% in a surprise move, boosting local markets and

signaling growing optimism by the government that it can tame

the country's triple-digit inflation.

The country's main stocks index jumped 1.6% to

hit a record high.

Elsewhere, Colombia's peso slipped 0.1% against the

greenback, hitting its lowest level in a year, a day after the

local central bank cut the benchmark interest rate to 9.75%.

A recent drop in oil prices and investors pricing in fiscal

instability in Colombia has also weighed on the peso.

A Reuters poll showed Colombian inflation is expected to

continue a downward trend in October, as analysts trimmed their

forecasts for 2024, but predicted faster price growth in 2025.

Currencies of copper producers Chile and Peru

were flat on the day, with both the countries' stock

markets closed for public holidays.

On the equities front, an index tracking regional bourses

dropped nearly 2% to a near three-month low, on

track for a weekly decline.

Key Latin American stock indexes and currencies:

MSCI Emerging Markets 1122.01 0.22

MSCI LatAm 2080.37 -1.88

Brazil Bovespa 128344.78 -1.06

Mexico IPC 50740.44 0.16

Chile IPSA 6550.32 0.00

Argentina Merval 1878041.66 1.585

Colombia COLCAP 1356.62 -0.14

Brazil real 5.8695 -1.43

Mexico peso 20.2429 -1.15

Chile peso 960.8 0.03

Colombia peso 4428 -0.07

Peru sol 3.773

0.00

Argentina peso (interbank) 990 0.10

Argentina peso (parallel) 1170 1.71