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Latam stocks down 0.47%, FX down 0.4%

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Mexico posts $296 mln trade surplus in July

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Brazil loan defaults hit highest level in about 8 years

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Nvidia ( NVDA ) results due after US close

By Pranav Kashyap

Aug 27 (Reuters) - Most Latin American currencies dipped

on Wednesday as the dollar staged a comeback, while equities

were largely steady as caution prevailed ahead of Nvidia's ( NVDA )

results.

MSCI's index for Latin American currencies

declined 0.5%.

The dollar clawed back some losses, appearing to

brush off immediate fears over the Federal Reserve's

independence followed U.S. President Donald Trump's attempt on

Monday to fire Fed Governor Lisa Cook.

The Mexican peso shed 0.5%, just off a one-week low,

while its benchmark stock index was largely flat. Data

showed the country posted a $296 million trade surplus in July.

With only July's jobless data on deck in Mexico, the peso's

moves this week have been largely driven by macro trends.

Recent indicators continue to paint a picture of a sluggish

economy, underscoring expectations for further rate cuts.

Minutes from Banxico's latest policy meeting revealed that

board members were open to easing rates further to support

growth.

"We believe that Banxico has more room to continue its own

easing cycle, keeping reasonable interest rate differentials

with the US and without putting undue pressure on the peso,"

Morgan Stanley analysts said.

Meanwhile, the burden of Brazil's high borrowing costs

continued to creep up. Fresh data showed loan defaults rose to

their highest in nearly eight years in July, underscoring the

strain of interest rates at 15%. Borrowing costs were at almost

a two-decade high, and second only to Argentina in the region.

Meanwhile, the data also showed credit growth is sputtering,

adding to signs of economic fatigue.

Brazil's real slipped 0.2%, while the country's

equities were flat. Investors awaited speeches by the

country's finance minister and the president of the central bank

and the release of economic data.

MSCI's index for the regions' equities lost

0.5%. Most equities in the region were largely flat, following

Wall Street, with the focus on Nvidia's ( NVDA ) earnings after the U.S.

close.

The AI titan has become the heartbeat of the global tech

rally, and data showed options traders are pricing in a $260

billion swing in its market value.

"The stock market has been all but assured of a September

rate cut, the next hurdle for markets to climb is Nvidia's ( NVDA )

earnings," said Clark Bellin, president and chief investment

officer, Bellwether Wealth.

"Investors look to this company every quarter for

reassurance that the AI story is still intact."

Meanwhile, the Argentine peso attempted to

recover lost ground, up 0.1% after falling nearly 3% on Monday.

Corruption allegations shook the country's political landscape

and financial markets.

Stocks in Buenos Aries dropped 1.5%.

The Chilean peso slipped 0.19%, while equities in

Bogota were up 0.3%.

Key Latin American stock indexes and currencies:

Equities Latest Daily %

change

MSCI Emerging Markets 1267.2 -0.55

MSCI LatAm 2344 -0.47

Brazil Bovespa 137809.85 0.03

Mexico IPC 58077.16 -0.1

Argentina Merval 2002445.3 -1.52

Chile IPSA 8856.59 0.34

Colombia COLCAP 1851.32 -0.23

Currencies Latest Daily %

change

Brazil real 5.4436 -0.24

Mexico peso 18.74 -0.47

Chile peso 968.06 -0.19

Colombia peso 4056.84 -0.37

Peru sol 3.5483 -0.7

Argentina peso (interbank) 1355 0.11

Argentina peso (parallel) 1340 1.87