*

Brazil economic activity rises in June

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EM debt funds see worst outflows since May - BofA

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BHP Escondida strike ends

(Updated at 3:15 p.m. ET/1915 GMT)

By Lisa Pauline Mattackal and Shubham Batra

Aug 16 (Reuters) - Latin American stocks and currencies

edged lower on Friday, though indexes tracking the region were

set for weekly gains after data eased concerns of slowing growth

while keeping intact the case for a Federal Reserve September

interest rate cut.

MSCI's index tracking Latin American currencies

was down 0.1%, while stocks

slipped about 0.2%.

For the week, the currency index was on track to gain 0.5%,

while the stocks index looked to rise 3%. More broadly, MSCI's

index of global emerging market stocks was on pace for

its best week since April with a nearly 3% gain.

Stronger-than-expected U.S. retail sales data on Thursday

capped a broadly positive week for risk assets, as it brought

relief to investors worried about growth in the world's largest

economy while traders held bets for a September rate cut by the

Federal Reserve.

"Recent robust U.S. data should alleviate concerns about the

economic outlook and provide support to EM FX and credit

spreads. However, we think the rates rally looks stretched and

geopolitical tail risks, especially in the Middle East, remain a

key source of uncertainty," said a note from Barclays.

The growth picture for individual economies in the region

also picked up. Data showed Brazil's IBC-Br index, a predictor

of gross domestic product, beat forecasts with a seasonally

adjusted 1.4% rise in June versus a forecast for 0.5% growth.

Brazil's real edged higher against the dollar.

Declining oil prices weighed on the currencies of the

region's producers, with the dollar rising 0.4% against

Colombia's peso.

Brazil's Bovespa slipped 0.1% and Argentina's Merval

rose 1.3%, but bourses in Mexico, Colombia

and Peru slipped between 0.3% and 0.8%.

All major regional bourses were set for weekly gains, led by

the Merval's 3.8% rise.

Lower interest rates in the U.S. typically boost demand for

higher-yielding emerging market assets. BNY Mellon flow data

showed larger purchases of high-yielding currencies in Latin

American and emerging Central European economies.

EM equities extended their inflow streak for an 11th week,

adding $1 billion in the week to Wednesday, according to data

from Bank of America Global Research.

However, the data showed investors remain wary of EM debt,

with bond-focused funds notching their biggest outflows since

May at $1 billion.

Meanwhile, copper prices dropped after a deal was

reached to halt a strike at BHP's Escondida copper mine in

Chile, easing supply concerns. Shares of the mining giant

were up 2%.

Key Latin American stock indexes and currencies at 1925 GMT:

Stock indexes Latest Daily % YTD % change

change

MSCI Emerging 1095.34 1.8 5.01

Markets

MSCI LatAm 2317.91 -0.16 -12.81

Brazil Bovespa 134022.4 -0.1 -0.12

0

Mexico IPC 54092.08 -0.32 -5.74

Chile IPSA 6457.63 0.82 3.346

Argentina MerVal 1666509. 1.377 79.25

80

Colombia COLCAP 1355.83 -0.31 13.457

Currencies Latest Daily % YTD % change

change

Brazil real 5.4690 0.26 -39.42

Mexico peso 18.6203 0.09 5.79

Chile peso 938.5 -0.64 -34.51

Colombia peso 4027.36 -0.38 -25.96

Peru sol 3.7233 0.17 -13.06

Argentina peso 941.0000 0.00 -98.02

(interbank)

Argentina peso 1325 1.89 -98.55

(parallel)