(Adds dropped word in headline)

*

Brazil rate decision awaited

*

Telefonica Brasil ( VIV ) down after missing qrtly profit

estimates

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Stocks off 0.7%, FX down 0.5%

By Shashwat Chauhan

May 8 (Reuters) - Currencies of most resource-rich Latin

American nations slipped on Wednesday, as softening commodity

prices on a stronger dollar weighed, while Brazil's real was

amongst top losers ahead of a likely interest rate cut later in

the day.

The Brazilian currency shed 0.2% against the dollar

as iron ore prices, one of the country's top exports, came under

pressure.

The Brazilian central bank's rate-setting committee is

widely expected to cut interest rates by at least 25 basis

points later in the day, a third rate cut this year.

"There are reasons for Brazil's BCB to be more

cautious/hawkish when it meets today: the recent weakness in the

BRL, a slowdown in disinflation, fiscal expansiveness, and

adverse supply-side shocks (floods)," said Thierry Wizman,

global FX & rates strategist at Macquarie.

"But the longer-term narrative is still of a BCB that will

get more dovish as time goes on, with its ongoing staff changes

and alignment with the administration."

Oil producer Mexico's peso lost 0.3% against the

dollar as crude oil prices fell after industry data showed a

rise in crude and fuel inventories in the U.S. and the greenback

strengthened.

Currency of fellow oil producer Colombia also shed

0.3% ahead of the release of April consumer prices data later in

the day.

Top copper producer Chile's peso depreciated 0.2%

against the greenback as prices of the red metal came under

pressure, while Peru's sol also lost 0.4%.

As of 10:22 a.m. ET (1422 GMT), MSCI's index for Latin

American currencies lost 0.5% on track to snap a

four-day winning streak, while a gauge of stocks

lost 0.7%.

Shares in regional heavyweight Brazil fell over 4%

as downbeat earnings weighed, while bourses in Mexico and

Colombia eased 0.7% and 0.1%, respectively.

Brazilian telecommunications operator Telefonica Brasil ( VIV )

slipped more than 5% after posting a net profit below

analysts' expectations.

Ambev SA ( ABEV ) posted a small decline in net profit for

the first quarter but handily beat market expectations. Shares

of the Brazilian brewer, however, slipped around 5%.

On the data front, retail sales volumes in Brazil remained

unchanged in March from February, while consumer prices in Chile

rose more than expected in April.

HIGHLIGHTS

** Brazil polls show mixed scenario for Lula's approval

ratings

** Brazil floods leave 150,000 homeless, scores dead or

missing

Key Latin American stock indexes and currencies:

Latest Daily %

change

MSCI Emerging Markets 1066.11 -0.2

MSCI LatAm 2493.04 -0.72

Brazil Bovespa 129086.40 -0.1

Mexico IPC 56697.54 -0.72

Chile IPSA 6579.70 1.28

Argentina MerVal 1485982.75 1.528

Colombia COLCAP 1378.72 -0.14

Currencies Latest Daily %

change

Brazil real 5.0815 -0.29

Mexico peso 16.9250 -0.29

Chile peso 938.8 -0.20

Colombia peso 3900.82 -0.29

Peru sol 3.7229 -0.37

Argentina peso (interbank) 881.5000 -0.06