*

Mexican lower house passes controversial judicial reform

*

Brazil's industrial output falls more than expected in

July

*

Chile cenbank trims growth estimates

*

Latam stocks up 0.1%, FX down 0.3%

(Updated at 2000 GMT)

By Shashwat Chauhan and Lisa Pauline Mattackal

Sept 4 (Reuters) -

Most Latin American currencies reversed gains on Wednesday

as lackluster U.S. economic data increased demand for safe-haven

assets and weighed on commodity prices, while Mexico's peso lost

ground after Congressional approval of a controversial judicial

reform bill.

Data showed U.S. job openings dropped to a 3-1/2-year low in

July, suggesting the labor market was losing steam while earlier

data pointed to slowing services sector activity in China,

raising concerns about growth and demand in the world's two

largest economies.

MSCI's index for Latin American currencies

lost 0.3%, reversing gains from earlier in the

day.

Meanwhile, Mexico's peso dropped 0.8% against the

dollar after its lower house of Congress approved a

controversial judicial reform which has unnerved investors over

the past several weeks.

"If enacted, Mexico's judicial reform is likely to

curtail survey-based GDP (gross domestic product) growth

projections even further, in furtherance of a manufacturing

slowdown already in the data," said Thierry Wizman, Global FX &

Rates strategist at Macquarie.

"The prevailing uncertainty will prevent MXN

appreciation, even if Banxico fails to cut the policy rate again

in September."

The reforms now pass to the Senate, where debate is expected

to start next week. Political uncertainties have compounded

concerns for Mexico's peso, with the dollar strengthening over

7% against the currency since the start of August.

Declines in commodity prices on global demand worries

also weighed on the currencies of resource-rich Latin America,

offsetting optimism around likely interest rate cuts from the

U.S. Federal Reserve this month that would likely weaken the

dollar and lift appetite for riskier emerging markets.

Chile's peso dipped 1.6% and Peru's sol fell

0.3% as prices of copper, a top export for both countries, hit a

three-week low.

Chile's central bank lowered its growth estimates for

2024 while raising projections for headline inflation.

Brazil's real was little changed against the dollar.

Government statistics agency IBGE said Brazil's industrial

production fell more than expected in July, losing steam after a

stellar performance in the previous month.

Investors will watch Friday's U.S. August non-farm

payrolls report for more clues on the Federal Reserve's

September rate cut plans and the labor market's trajectory.

Stocks in the region fared somewhat better, with MSCI's

gauge of Latin American equities gaining 0.1%.

Regional heavyweight Brazil's Bovespa stock index

gained 1.6% after falling for the last four sessions, while

Mexico's benchmark added 0.5%.

That bucked the trend in broader emerging markets, with

a gauge of global emerging market stocks fell 1.5% as

chips-heavy bourses in Asia clocked steep losses following U.S.

firm Nvidia's sharp drop on Tuesday.

HIGHLIGHTS

** Debt woes and funding needs in focus as China hosts

African leaders

** Brazil finance minister says he trusts central bank

officials ahead of rate decision

** Colombia's Ecopetrol says operations affected by pipeline

attacks, road blockades

Key Latin American stock indexes and currencies:

MSCI Emerging Markets 1074.15 -1.47

MSCI LatAm 2215.35 0.14

Brazil Bovespa 136461.87 1.57

Mexico IPC 51819.27 0.45

Chile IPSA 6388.9 0.03

Argentina Merval 1794002.4 3.386

1

Colombia COLCAP 1336.16 -0.87

Brazil real 5.6417 0.07

Mexico peso 19.9345 -0.76

Chile peso 943.11 -1.55

Colombia peso 4177.5 0.14

Peru sol 3.7817 -0.25

Argentina peso (interbank) 953 0.1049317

94

Argentina peso (parallel) 1285 1.9455252

92