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Chile GDP slips in Q2

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Brazil's main stock index hits record high

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Mexican economy up 1.1% y/y in July

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Colombian markets closed

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Stocks index up 1.8%, FX up 1.1%

(Updated at 1958 GMT)

By Lisa Pauline Mattackal and Ankika Biswas

Aug 19 (Reuters) - Most Latin American assets tracked

emerging market peers higher on Monday, with Brazil's main stock

index hitting a record high, as growing hopes of stable economic

growth and looser U.S. monetary policy lifted risk sentiment and

weakened the dollar.

The dollar weakened 0.6% against a basket of

currencies to a seven-month low, lifting the MSCI Latin American

currencies index up 1.1% to its highest level

since late July and the stocks gauge nearly 2%

higher.

MSCI's international emerging market currency index

also hit a record high at the start of a week

packed with central bank events.

After bouts of volatility, emerging market assets looked set

to build on gains from the previous week as data pointing to

U.S. economic growth soothed worries about slowing global

demand.

Focus will now be on U.S. Fed Chair Jerome Powell's Friday

speech in Jackson Hole, where investors anticipate he will make

the case for easing borrowing costs.

Chile's peso led Latam FX gains, up 1.6% against the

dollar, with a rise in copper prices offsetting data that showed

the country's gross domestic product (GDP) slipped in the second

quarter.

Chile's Q2 GDP fell 0.6% on a quarterly basis, in line with

forecasts and likely opening the door for more interest rate

cuts this year.

Next in line, Brazil's real also gained over 1%

against the dollar, while the country's main stock index

climbed 1.5% to hit a record high, boosted by miner Vale SA ( VALE )

and lender Banco Bradesco.

The country's monetary policy director Gabriel Galipolo said

there is no guidance from policymakers for their upcoming

interest rate-setting decision on Sept. 17-18, and that all

options are on the table.

Economists now see Brazil's benchmark interest rate at the

end of 2025 at 10% from the 9.75% previously expected, a weekly

central bank survey showed. A growing number of forecasters now

see the bank hiking rates at its September meeting.

"The (monetary policy committee) Copom has emphasized its

data-dependent stance. And recent indicators suggest that

monetary policy is not sufficiently restrictive," XP economists

led by Caio Megale wrote in a note to clients.

The Mexican peso, however, lagged regional peers,

losing 0.3% after rising for the past four trading sessions.

Preliminary estimates showed Mexico's economy likely grew

1.1% in July compared with the same month a year earlier,

national statistics agency INEGI said, and the economy likely

dropped 0.1% on a monthly basis.

A separate Reuters poll showed the country's year-on-year

inflation likely eased in the first half of August, bolstering

the case for another rate cut at its meeting next month.

On a year-to-date basis, all major Latin American currencies

still remain down against the dollar with the greenback

strengthening around 12%, 11%, and 4% respectively against the

Mexican peso, Brazilian real and Colombian peso.

Local Colombian markets were closed for a holiday.

Key Latin American stock indexes and currencies at 1958 GMT:

MSCI Emerging Markets 1104.76 1.02

MSCI LatAm 2359.57 1.89

Brazil Bovespa 135971.95 1.51

Mexico IPC 54240.45 0.29

Chile IPSA 6465.26 0.94

Argentina Merval 1644954.2 -0.265

9

Colombia COLCAP 1361.01 0.07

Brazil real 5.3913 1.53

Mexico peso 18.6935 -0.33

Chile peso 923.06 1.58

Colombia peso 4028 0.07

Peru sol 3.7322 -0.34

Argentina peso (interbank) 943 -0.106044

539

Argentina peso (parallel) 1330 1.1278195

49