*

Peru's central bank expected to leave interest rates

unchanged

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Brazil's retail sales unexpectedly rise to record high in

May

*

Latam stocks up 0.3%, FX off 0.3%

(Updated at 03:30 p.m. ET/ 1930 GMT)

By Johann M Cherian and Shristi Achar A

July 11 (Reuters) -

A gauge of Latin American currencies fell against the dollar

on Thursday, with investors cautious ahead of an interest rate

decision in Peru and assessed Banxico's monetary policy minutes.

MSCI's index tracking regional currencies

slipped 0.3% against a weakening dollar, after data showed that

headline U.S. consumer prices unexpectedly fell in June.

However, the dollar's slip saw the Japanese yen

jump nearly 3%, its biggest daily surge since late 2022, raising

questions about official buying of the Asian currency.

Back in resources-rich Latin America, Brazil's real

fell nearly 0.6%, with traders assessing retail sales data that

showed an unexpected rise to record highs, a day after data

signaled moderating price pressures for consumers.

Markets also assessed the implications of a tax overhaul

that the country's lower house approved, which aims to boost

productivity by streamlining a tax system critics blame for

burdening businesses with excessive costs.

"It is a good thing because in the past ... it was a web of

taxes and it was so complicated that it discouraged a lot of

economic activity," said Eduardo Ordonez Bueso, an emerging

markets debt portfolio manager at BankInvest.

Separately, the country's Senate Committee postponed voting

on a constitutional amendment proposal granting the central bank

greater financial autonomy from the executive.

Concerns around Brazil's fiscal standing along with central

bank independence have been among top reasons for the real

trading near two-year lows following a recent plunge in value.

The Mexican peso edged 0.3% up. Minutes from the

local central bank's June monetary policy meeting showed the

five-member governing board foresaw that the inflationary

environment may allow for discussing further rate cuts at

upcoming meetings.

Chile's peso and Peru's sol gained 0.1% and

0.6% respectively, with the currencies of both copper exporting

countries hovering near one-month highs.

Focus was on an interest rate decision by the Peruvian

central bank later in the day, where economists polled by

Reuters see borrowing costs being held at 5.75%.

"The (Monetary Policy Committee) has likely entered the

fine-tuning stage of the cutting cycle. Accordingly, we view the

MPC as favoring a cautious wait-and-see approach to cutting that

endows it with greater policy flexibility," strategists at

Goldman Sachs said in a note.

MSCI's index tracking regional equity indexes

climbed nearly 0.3%, with heavyweight Brazil's

Bovespa adding 0.8%, helped by a 2% rise in Telefonica

Brasil ( VIV ) on a Morgan Stanley upgrade.

Bourses in Mexico, Chile and Argentina

rose between 0.3% and 0.9%.

Meanwhile, the International Monetary Fund said Argentina's

preliminary data show the program's fiscal and reserves targets

continue to be met.

Key Latin American stock indexes and currencies:

Latin American market prices from

Reuters

Stock indexes Latest Daily %

change

MSCI Emerging Markets 1125.92 1.32

MSCI LatAm 2308.18 0.28

Brazil Bovespa 128237.62 0.8

Mexico IPC 54460.33 0.33

Chile IPSA 6526.91 0.92

Argentina MerVal 1703600.39 0.804

Colombia COLCAP 1370.57 0.34

Currencies Latest Daily %

change

Brazil real 5.4438 -0.58

Mexico peso 17.7623 0.30

Chile peso 914.2 0.12

Colombia peso 3977.5 -0.31

Peru sol 3.7459 0.65

Argentina peso (interbank) 919.0000 0.00

Argentina peso (parallel) 1445 0.35