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Brazil's inflation slows to 0.21% in mid-April vs est

0.29%

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Brazil's cenbank chief points to US interest rates as

major

beacon

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S&P Global Ratings cuts Peru's rating

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Latin American stocks jump 1.5%, FX adds 0.8%

By Bansari Mayur Kamdar

April 26 (Reuters) - Currencies and stocks in Latin

America rose on Friday, setting both indexes on track for weekly

gains, tracking upbeat risk sentiment globally as Wall Street

rallied on robust earnings reports.

The MSCI index for Latin American currencies

gained 0.8% and was on track to end the turbulent week 1.4%

higher following steep losses earlier in the month when

investors walked away from riskier assets due to uncertainties

from heightened tensions in the Middle East.

Brazil's real gained 0.9% against the dollar.

Data showed prices in Latin America's largest economy rose

slightly less than expected in the mid-April reading.

"This inflation release probably just keeps the door open to

a 50 bp move, rather than a smaller 25 bp cut," said William

Jackson, chief emerging markets economist at Capital Economics.

"But the key point is that, with fiscal concerns building

and the real under pressure, the pace of monetary easing is set

to slow very soon."

Latin American currencies have struggled this month against

a strengthening dollar as investors pushed back bets for Federal

Reserve interest rates cuts.

Brazil's central bank chief Roberto Campos Neto emphasized

that U.S. interest rates are currently a major beacon, with all

eyes focused on the inflation of the world's largest economy,

which has stopped falling.

Mexico's peso, Peru's sol and the Colombian

peso advanced between 0.4% and 1.0%, respectively against

the dollar on Friday, tracking broader markets.

The S&P Global Ratings on Thursday downgraded Peru's rating

to BBB- from BBB, citing political difficulties facing the South

American country, but kept the outlook at "stable."

The Chilean peso gained 0.6% against the greenback,

setting it on track for its second straight weekly gain as firm

copper prices continued to support the currency of the top

copper producer.

Regional stocks were up 1.5% and also on

track for weekly gains, with Brazil's Bovespa index

leading gains on boost from financial stocks.

The Mexican Senate approved the creation of a new pension

fund on Thursday aimed at boosting payouts to the lowest-earning

recipients.

Argentina's central bank lowered the benchmark interest rate

to 60% annually from 70%, the monetary policy entity said on

Thursday.

Elsewhere in emerging markets, the Russian rouble

rose against the dollar after the Bank of Russia

held its key interest rate at 16%, as expected.

Inflation is set to ease more slowly than previously

thought, Russia's central bank said.

Key Latin American stock indexes and currencies at 1428 GMT:

Stock indexes Latest Daily % change

MSCI Emerging Markets 1040.84 1.19

MSCI LatAm 2458.63 1.55

Brazil Bovespa 126249.95 1.29

Mexico IPC 57412.63 0.57

Chile IPSA 6346.38 0.55

Argentina MerVal 1251856.7 0.539

3

Colombia COLCAP 1358.90 0.66

Currencies Latest Daily % change

Brazil real 5.1166 0.90

Mexico peso 17.1426 0.31

Chile peso 943.1 0.54

Colombia peso 3926.6 0.91

Peru sol 3.7568 -0.39

Argentina peso (interbank) 874.5000 -0.06

Argentina peso (parallel) 1035 1.93