*

Chile's peso hits highest level since January

*

Brazil inflation slightly exceeds forecasts

*

Stocks, FX gain 0.4% each

By Shashwat Chauhan

May 10 (Reuters) - Currencies of copper producing

nations led gains across Latin American peers on Friday as

prices of the red metal rose, while most local currencies were

on track for weekly gains amid renewed global risk appetite.

As of 10:30 a.m. ET (1430 GMT), MSCI's index for Latin

American currencies gained 0.4%, though set for

its first weekly loss in three.

Copper producer Chile's peso led gains amongst local

peers, rising 0.2% against the dollar to its highest level in

over three months, tracking rising prices of the red metal.

Fellow copper producer Peru's sol held steady at 3.68

per dollar after the Andean nation's central bank cut its

benchmark interest rate by an expected 25 bps to 5.75% after

inflation slowed to the bank's target range last month.

Brazil's real held steady at 5.14 per dollar after

falling close to 1% in the last session when its central bank

cut interest rates by a smaller reduction of 25 basis points,

despite dissent from all four directors appointed by President

Luiz Inacio Lula da Silva.

Consumer prices in South America's biggest economy rose

0.38% in April from March, government statistics agency IBGE

said, slightly above economists' forecast of a 0.35% increase in

a Reuters poll.

"The inflation picture remains benign in Brazil, and we

still believe the headline rate will continue to fall over the

coming months thanks to the lagged effect of tight monetary

policy, subdued commodity prices, and benign weather and supply

conditions," said Andres Abadia, chief LatAm economist at

Pantheon Macroeconomics.

Colombia's peso was flat at 3885 per dollar, while

the Mexican peso edged 0.1% lower following a near 1%

jump in the last session when the Bank of Mexico, held its

benchmark interest rates steady at 11.00%, as expected.

Most Latin American currencies eyed weekly gains, with the

Chilean peso set to be the best performing one this week as risk

sentiment flourished amid growing hopes that the U.S. Federal

Reserve could cut interest rates sometime this year.

A gauge Latin American stocks rose 0.4%, set

for its third straight weekly advance. Equities in heavyweight

Brazil gained 0.2%, boosted by rising real estate and

industrials shares.

HIGHLIGHTS

** Chile cenbank likely to cut interest rate by 50 bps in

May, analysts say

** Copper output from Chile's Codelco down 10% in March

** Argentina's YPF doubles first-quarter profit as

production, prices climb

Key Latin American stock indexes and currencies:

Stock indexes Latest Daily %

change

MSCI Emerging Markets 1071.84 0.78

MSCI LatAm 2495.84 0.4

Brazil Bovespa 128374.74 0.15

Mexico IPC 57907.08 0.11

Chile IPSA 6614.58 -0.23

Argentina MerVal 1424382.62 -0.734

Colombia COLCAP 1393.00 0.42

Currencies Latest Daily %

change

Brazil real 5.1472 -0.11

Mexico peso 16.7571 -0.04

Chile peso 922.5 0.22

Colombia peso 3885.85 0.04

Peru sol 3.6888 -0.07

Argentina peso 882.5000 0.06

(interbank)

Argentina peso 1025 1.95

(parallel)

(Reporting by Shashwat Chauhan in Bengaluru)