*

Brazil inflation index up 1.23% in month to mid-February

*

Trump says tariffs on time, Sheinbaum says talks ongoing

*

Hungary central bank keeps rates on hold

*

MSCI Latam stocks index flat, FX index off 0.1%

(Updates to mid-session trading)

By Lisa Pauline Mattackal and Purvi Agarwal

Feb 25 (Reuters) - Latin American currencies were

broadly steady against a faltering U.S. dollar on Tuesday, as

the greenback came under pressure from a drop in yields and

offset concerns about escalating U.S. tariffs.

The dollar lost ground, as U.S. Treasury yields

slipped after concerns around the resilience of the U.S. economy

renewed some expectations for multiple U.S. rate cuts this year.

Investors are pricing in about 57 basis points of easing

from the U.S. central bank, up from 40 last week as per LSEG

data.

Already grappling with higher U.S. rates and looming tariff

threats from U.S. President Donald Trump, the change in rate

expectations could provide some relief to emerging market

economies.

On the day, Mexican President Claudia Sheinbaum said talks

were ongoing with the U.S. government, after Trump said tariffs

on Mexican and Canadian imports are "on time and on schedule."

Mexico's peso was flat, and so was Argentina's peso

and the Peruvian sol.

"This comes as a bit of a surprise given the moves

Mexico and Canada have made on the border to avoid tariffs...

the market has become quite desensitized to the tariff noise and

probably expects this is just part of the negotiation process,"

said Brad Bechtel, global head of FX at Jefferies.

Brazil's real led gains, rising 0.5%, after data

showed the IPCA-15 consumer price index posted its biggest

monthly rise in almost three years in February.

"(The data) is unlikely to prompt the monetary policy

committee to deviate from its guidance for at least one more

100bp hike... inflation remains above the central bank's 3%

target and fiscal concerns have not gone away," said Jason

Tuvey, deputy chief EM economist at Capital Economics.

Separately, a poll showed support for President Luiz Inacio

Lula da Silva has dipped as voters worry about rising prices.

The currency in oil-exporter Colombia fell 0.2%, as

oil prices dipped over 2%.

Chile's peso was 0.2% higher, despite a fall in

copper prices.

A large power outage struck

vast swaths

of Chile, including the mining-intensive north, affecting

copper mines such as

Escondida

and state-owned Codelco. Antofagasta ( ANFGF ) said it was

operating with backup power generation.

Stocks in the region were broadly lower. Argentina's Merval

slumped 2.7% and Mexico's main index fell 1.2%.

Colombia's COLCAP was down 0.1%.

Brazil's Bovespa, bucked the trend with a 0.6% rise,

boosted by a 1% gain in Itau Unibanco ( ITUB ) and Eletrobras

each.

MSCI's index of Latam currencies dipped 0.2%, and an index

of regional stocks was flat.

Elsewhere, Hungary's forint lost 0.2% against the

euro, breaking the 400 per euro level, after its central

bank held rates at 6.50%, as expected.

HIGHLIGHTS

** Colombia's Petro names Benedetti as interior minister:

source

** Low savings, shallow markets stymie African leaders' push

to mobilise local cash

** Ecuadorean president forecasts more than 4% economic

growth this year

** Nigeria's economy grows at fastest in three years in

fourth quarter

Key Latin American stock indexes and currencies at 1940 GMT:

MSCI Emerging Markets 1122.5 -1.17

MSCI LatAm 2051.79 0.03

Brazil Bovespa 126185.22 0.63

Mexico IPC 53082.64 -1.16

Chile IPSA 7316.72 0.07

Argentina Merval 2285968.7 -2.66

4

Colombia COLCAP 1649.41 -0.12

Brazil real 5.7508 0.48

Mexico peso 20.46 0.05

Chile peso 941.58 0.19

Colombia peso 4131.5 -0.23

Peru sol 3.6802 0.08

Argentina peso (interbank) 1060.5 -0.02

Argentina peso (parallel) 1220 1.64