* MSCI LatAm stocks up 0.2%, FX flat
* Brazil's deficit widens to 10% of GDP Y/Y in June
* Chile's copper output rises, manufacturing production
declines
(Updates with afternoon trading levels)
By Utkarsh Hathi and Avinash P
July 31 (Reuters) - Most Latin American currencies weakened
against the dollar on Friday and equities in the resource-rich
region were mixed on easing metal prices, while investors
assessed developments in the Middle East.
MSCI's index tracking Latin American currencies
was muted, easing after strong gains in the
previous session.
The Colombian peso fell 0.7%, ahead of the central
bank's interest rate decision later in the day, with the bank
widely expected to raise rates to curb inflation.
Still, the peso was on track for its biggest monthly gain in
a decade, boosted by the victory of a conservative party in
June.
Rachel Ziemba, founder of Ziemba Insights, said the
Colombian peso's strength reflects optimism over the incoming
government, stronger investment prospects and higher oil prices,
with Colombian assets recovering after years of weakness.
Local stocks advanced 1.9%.
Regional stocks were a mixed bag, with the MSCI Latin
American equities gauge rising 0.2%, and heading
for monthly gains, as higher commodity prices supported
sentiment.
Ziemba said higher oil prices have benefited Latin American
oil exporters and helped shield some economies in the region
from the broader impact of the shock.
In Brazil, the real slipped 0.3%, while stocks were
trading 0.8% higher after a delayed market opening on Friday.
The gains were led by a 13% jump in lender Santander Brasil
after its parent Santander offered to
acquire the remaining stake it does not already own in the
Brazilian unit.
Brazil's overall budget deficit widened to nearly 10% of
gross domestic product (GDP) in the 12 months through June, data
showed, as higher interest costs weighed on the public finances.
"A deterioration on the fiscal (position) means that there
could be a delay in rates coming down, which means that it's
likely to be a headwind to growth," said Rohit Chopra, portfolio
manager at Lazard Asset Management.
In a potential boost for Brazil's left-wing party and
President Luiz Inácio Lula da Silva, the country's largest
right-wing party said on Friday it would stay neutral in
October's presidential election.
Meanwhile, in Argentina, President Javier Milei unveiled a
bill to reform the central bank's charter on Thursday, to
strengthen the bank's independence and restrict its ability to
finance government spending.
The Argentine peso gained 0.3%, while its
equities were flat.
Oil prices gained 1.1% as traders assessed shipping
disruptions in the Strait of Hormuz and attacks in the Red Sea
by Iran-backed Houthis.
Meanwhile, Chile's copper output rose in June, while
manufacturing production fell 3.2%. The Andean nation is the
world's largest copper producer.
The Chilean peso edged 0.3% lower, while its stocks
fell 0.6%, tracking lower copper prices.
Unemployment in Chile was recorded at 9.4% in the second
quarter, data showed, while Colombia's urban jobless rate fell
to 8% in June.
Following is a summary of key Latin American stock indexes
and currencies:
Latin American market
prices from Reuters
Equities Latest Daily %
change
MSCI Emerging Markets 1662.67 6.38
MSCI LatAm 3101.15 0.24
Brazil Bovespa 178546.19 0.78
Mexico IPC 67155.37 -0.2
Chile IPSA 10965.66 -0.59
Argentina Merval 3304245.3 -0.02
7
Colombia COLCAP 2386.33 1.87
Currencies Latest Daily %
change
Brazil real 5.0725 -0.27
Mexico peso 17.316 0.04
Chile peso 928.13 -0.27
Colombia peso 3151.68 -0.74
Peru sol 3.3895 -0.17
Argentina peso (interbank) 1485 0.30
Argentina peso (parallel) 1540 1.62