*

Mexico's inflation accelerates, rate cut unlikely in May

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Argentina cenbank: bullish on inflation, more work needed

on FX

reserves

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Latam stocks off 0.5%, FX slips 0.3%

By Bansari Mayur Kamdar

April 24 (Reuters) - Currencies in Latin America eased

on Wednesday as the dollar regained some ground, with the

Mexican peso sliding even as data showing acceleration in

inflation reinforced bets that the central bank will hold

interest rates.

The peso slid 0.7% against a strengthening dollar,

while the broader Latin American currencies index

slipped 0.3%.

Mexico's consumer prices unexpectedly rose in the first half

of April, supporting expectations that the country's central

bank will hold its benchmark interest rate steady at its next

policy meeting.

"In our assessment, the recent FX and rate developments

(repricing of the US FOMC fed funds path and strong U.S. dollar)

and today's inflation print do not provide the central bank with

enough comfort to cut the policy rate at the May meeting," said

strategists at Goldman Sachs in a note.

Last week, Bank of Mexico Deputy Governor Jonathan Heath

also said the interest rate is likely to remain unchanged for

longer than expected by markets.

Mexican stocks slipped 0.4%. Capping losses, Alfa

gained 1.1% after the conglomerate posted a

first-quarter net profit of 1.02 billion pesos ($62 million),

swinging to profit from the loss of 252 million pesos it posted

a year earlier, citing a strong performance by its food unit.

Argentina's central bank is bullish that the country's

monthly inflation rate will come down faster than analysts

expect, a bank presentation showed, but sees more work to be

done replenishing foreign currency reserve levels.

The Argentinian Merval index shed 1.6%, extending

losses for a second straight day, with investors focused on

massive demonstrations to reject President Javier Milei's budget

cuts to public universities.

Chile's peso and Peru's sol bucked the

weakness in the region, up 0.2% each as strong copper prices

boosted the currencies of the top producers of the metal.

Brazil's real and Colombia's peso shed 0.8%

and 1.0%, respectively, against the dollar.

Exchange rate repricing with a stronger dollar will hurt

countries that started their cutting cycle earlier, Brazil's

central bank director Gabriel Galipolo said.

In Colombia, the central bank next week is expected to cut

its key interest rate by 50 basis points, to support the

country's economic recovery without losing control of inflation,

a Reuters poll showed.

Elsewhere in emerging markets, the Indonesian rupiah

rose 0.4% against the dollar after Bank Indonesia's surprise 25

bps hike, in efforts to support the currency which has fallen to

four-year lows on growing risk aversion and a delay in the

expected timing of any U.S. policy easing.

Most stock markets in the Gulf ended lower as Israel

intensified strikes across Gaza and the army ordered fresh

evacuations in the north of the enclave.

Key Latin American stock indexes and currencies at 1448 GMT:

Stock indexes Latest Daily %

change

MSCI Emerging Markets 1033.39 1.38

MSCI LatAm 2427.22 -0.49

Brazil Bovespa 125103.50 -0.04

Mexico IPC 56391.21 -0.43

Chile IPSA 6430.98 -0.6

Argentina MerVal 1226546.2 -1.542

2

Colombia COLCAP 1346.58 -0.1

Currencies Latest Daily %

change

Brazil real 5.1646 -0.71

Mexico peso 17.0873 -0.87

Chile peso 953.7 0.20

Colombia peso 3937.54 -1.04

Peru sol 3.6903 0.14

Argentina peso (interbank) 873.0000 0.00