*

Fiscal deficit to shrink with higher revenues, lower

rates-

Brazil's Lula

*

Argentina loses appeal to overturn $1.7 bln bill in UK

securities case

*

Latam FX down 1.1%, stocks off 2.4%

(Updated at 3:34 p.m. ET/ 1934 GMT)

By Ankika Biswas and Shashwat Chauhan

June 12 (Reuters) -

Most Latin American currencies fell against the dollar on

Wednesday, with Brazil's real falling on fiscal concerns, while

the Mexican peso dropped amid lingering jitters over proposed

constitutional reforms in the region's second biggest economy.

Brazil's real fell 0.7% to its lowest level since

early January and the benchmark stock index dropped

1.3%, with analysts noting disagreements on the country's

sources of revenue.

President Luiz Inacio Lula da Silva said Brazil's fiscal

deficit reduction will be achieved through increased revenues

and lower borrowing costs, without affecting public investments.

Mexico's peso shed 1.1% in choppy trading, while the

local stock index dipped 0.2%

Mexican markets have endured a period of volatility due

to concerns over proposed constitutional reforms that the ruling

party wants to implement after its thumping victory in national

elections.

"The MXN has been triggered by political headlines and

uncertainty will be with us for some time, as we get more

details on the reforms," Barclays strategists said.

Mexico's President-elect

Claudia Sheinbaum

lauded the national economy as sound, describing the recent

slide of the peso currency as a "special moment" that should

adjust.

Most Latam currencies traded lower despite a global weakness

in the dollar after data showed U.S. consumer prices were

unexpectedly unchanged in May that saw traders ramp up their

bets of a September rate cut.

However, the greenback recovered some ground after the Fed

held interest rates steady and pushed out the start of rate cuts

to perhaps as late as December, with officials projecting only a

single quarter-percentage-point reduction for the year.

The MSCI index for Latin America currencies

dropped 1.1% to its lowest level since November, while a gauge

for stocks lost 2.4%.

The Colombian peso slumped 1% to its lowest since

early December, while Chile's peso bucked the trend to

rise 0.7% as copper prices appreciated.

Meanwhile, Argentina lost an appeal in a London court to

reverse a ruling which had left it facing a 1.56-billion-euro

($1.67 billion) bill over GDP-linked securities.

Argentina's Senate kicked off debate of a sprawling bill

that is key to new libertarian President Javier Milei's economic

reform plans.

HIGHLIGTHS

** Moody's says

Colombia's stable outlook

at risk due to weakness in economy

** Brazil's Lula backs

Petrobras bid

to explore offshore Equatorial Margin

**

Mexican financial system

stable and solid, says cenbank chief

Key Latin American stock indexes and currencies:

Latest Daily % change

MSCI Emerging Markets 1069.88 0.39

MSCI LatAm 2164.87 -2.35

Brazil Bovespa 120060.48 -1.29

Mexico IPC 53017.08 -0.22

Chile IPSA 6532.12 -0.14

Argentina MerVal 1575947.55 2.012

Colombia COLCAP 1383.83 -0.31

Currencies Latest Daily % change

Brazil real 5.4022 -0.81

Mexico peso 18.7780 -1.10

Chile peso 916.5 0.61

Colombia peso 4027.5 -0.97

Peru sol 3.762 -0.05

Argentina peso 901.5000 0.11

(interbank)

Argentina peso 1265 2.37

(parallel)