*

Brazil's industrial output down 0.2%

*

Brazil's Lula to swap Petrobras chairman, report says

*

Argentina's YPF slides on brokerage downgrade

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MSCI's Latam FX index up 0.1%; stocks up 0.6%

(Updates to afternoon trading)

By Pranav Kashyap and Johann M Cherian

Dec 4 (Reuters) - Most Latin American currencies were

steady on Wednesday, as investors assessed comments from U.S.

Federal Reserve Chair Jerome Powell, while Brazil's real hovered

near record lows after the release of disappointing economic

data.

The Brazilian currency was flat after data showed

industrial production unexpectedly fell in October, while the

country's services sector lost momentum in November as weaker

growth in output and new business hit job creation.

Finance Minister Fernando Haddad criticized the way part of

the financial market received the fiscal package launched last

week and said the measures announced were sufficient for the

moment.

A massive sell-off in Brazilian assets was triggered last

week after the government announced the much-awaited fiscal

package. Investors fear it will do little to reduce the

country's fiscal deficit, which is already at a decades-high

level.

"The latest fiscal package indicated that the incumbent

favors increased transfers to reach the middle class - at the

expense of fiscal sustainability and inflation. If implemented,

these would extend coverage to about three-fourths of the

population in 2026," analysts at Deutsche bank research said in

a note.

"The question is whether such transfers will outweigh or

not the burden of higher inflation, rates, weaker currency, and

overall instability."

The Mexican peso inched up 0.1% in choppy trading and

was last at 20.2 to the dollar. Mexican Labor Minister Marath

Bolanos said the country will raise its minimum wage by 12%

effective next month.

Concerns about public finances, expectations of tariffs

on exports to the U.S. under a Donald Trump administration in

2025 and a controversial judicial reform have weighed on the

peso and local stocks this year. On the day, the stocks

index added 1%.

A Reuters poll of foreign exchange strategists projected the

peso will remain fragile in the coming months.

Oil exporter Colombia's peso was flat. President

Gustavo Petro said he expects his Finance Minister Ricardo

Bonilla

to resign

amid an ongoing corruption scandal - the country's second

finance minister to leave since Petro's government took power in

August 2022.

MSCI's index for Latin American currencies

edged up 0.1% as the greenback traded tepidly.

Investors weighed the outlook for the U.S. Fed's

monetary policy easing cycle as Chair Powell said the recent

performance of the economy will allow the institution to be

more judicious

with the future path of interest rate cuts.

Meanwhile, an index tracking stocks in Latin America

gained 0.6%.

Heavyweight Brazil's Bovespa was flat, with oil

giant Petrobras down 0.7% after a report said

President Luiz Inacio Lula da Silva will appoint Petrobras

chairman Pietro Mendes to a senior position at oil regulator

ANP.

Argentina's Merval index slid 3.6%, with YPF SA

down 4% after brokerage UBS downgraded the oil

company to "neutral" from "buy".

Key Latin American stock indexes and currencies:

Latin American market

prices from Reuters

MSCI Emerging Markets 1100.39 0.26

MSCI LatAm 2002.32 0.54

Brazil Bovespa 126063.25 -0.06

Mexico IPC 51344.55 1.02

Chile IPSA 6631.6 0.03

Argentina Merval 2219801.6 -3.654

1

Colombia COLCAP 1386.69 -0.35

Brazil real 6.0383 0.09

Mexico peso 20.288 0.06

Chile peso 973.95 -0.2

Colombia peso 4439.5 flat

Peru sol 3.738 -0.05

Argentina peso (interbank) 1012.0 flat

Argentina peso (parallel) 1060 2.75

(Reporting by Pranav Kashyap and Johann M Cherian in Bengaluru)