*

Brazil's real rebounds day after Trump slaps tariffs

*

Peru's interest rate decision awaited

*

Brazil's annual inflation ticks up in June

*

MSCI Latam stocks down 1.3%, dip for fourth straight day

(Updates with afternoon trading levels)

By Ragini Mathur, Purvi Agarwal and Shashwat Chauhan

July 10 (Reuters) - Most Latin American currencies were

muted on Thursday, while Brazil's real recouped some of last

sessions' steep losses as markets assessed the impact of U.S.

President Donald Trump's latest tariff salvo.

Late on Wednesday, Trump targeted Brazil, Latin America's

biggest economy, with threats of 50% tariffs on exports to the

U.S., while simultaneously issuing tariff notices to seven

smaller trading partners.

President Luiz Inacio Lula da Silva said he wanted to find a

diplomatic solution to Trump's tariff order, but vowed to

reciprocate like-for-like if they take effect on August 1.

One month implied volatility on the currency

shot up to its highest since late April, with the real up

0.7% on Thursday after falling almost 2.4% in the last session.

"While a tariff announcement was arguably expected to

some extent, we think the high levy announced on Brazil goods -

currently one of the highest tariff rates announced by the US so

far - caught markets by surprise," UBS strategists led by Roque

Montero noted.

"Persistent FX weakness is a risk to watch since it

could weigh on domestic financial conditions and investment

flows."

The Brazilian real has been among the best performing

currencies in emerging markets so far this year, as high

interest rates make it a valuable carry trade currency.

Fresh data showed Brazil's monthly inflation slowed for the

fourth time in a row in June, but the annual rate ticked up and

remained well above the official goal.

Mexico's peso held steady at 18.6 per dollar

after minutes from its central bank's last policy meeting showed

most of the governing board supports smaller cuts, signaling a

more cautious approach.

Chile came under the spotlight recently after Trump slapped

50% tariffs on copper imports to the U.S. earlier this week, and

set a hard deadline of August 1. The local peso eased

0.1%.

Peru's sol inched 0.1% up in low volumes ahead of a

local monetary policy decision.

Stocks in Latin America were mixed, though MSCI's index for

regional equities fell 1.3%, set for a fourth

straight day of declines.

Heavyweight Brazilian stocks down 0.5%, with

planemaker Embraer ( ERJ ) down 3.7% as analysts warned that

the world's third-largest aircraft manufacturer, which has a

huge market in the U.S. for its executive planes and regional

jetliners, would be one of the firms most affected by the

tariffs.

Stocks in Mexico were flat, while those in Chile

and Colombia were slightly higher.

Argentina's Merval index slumped 2.9% as investors

returned from a market holiday.

HIGHLIGHTS

**

Brazil has few exit routes from Trump tariff but feels less

pain

** Egypt's central bank keeps key interest rates unchanged

** Copper output from Chile's Codelco climbs 17% in May

Key Latin American stock indexes and currencies:

MSCI Emerging Markets 1231.13 0.27

MSCI LatAm 2294.49 -1.28

Brazil Bovespa 136842.37 -0.46

Mexico IPC 56705.3 0.03

Argentina Merval 2068736.04 -2.866

Chile IPSA 8344.09 0.18

Colombia COLCAP 1683.16 0.48

Brazil real 5.5371 0.69

Mexico peso 18.61 0.1

Chile peso 950.05 -0.07

Colombia peso 4010.5 0.17

Peru sol 3.545 0.11

Argentina peso 1255 0.00

(interbank)

Argentina peso (parallel) 1275 0.39