(Updated at 1500 GMT)

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Mexico stocks outlook dampened by weaker economic

prospects

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Peru's copper output may fall short of 3 mln ton goal

-SNMPE

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Stocks, FX down 0.6%

By Shubham Batra

Aug 21 (Reuters) - Latin American currencies hit a

one-week low against the U.S. dollar on Wednesday, led by losses

in the Mexican peso for a second consecutive session ahead of

the minutes of the U.S. Federal Reserve's last policy meeting.

MSCI's Latin American index for currencies

slid 0.6% against the greenback that was languishing at its

weakest level in the current year.

Mexican peso extended its losses from previous

session, slipping 1.3% ahead of a slew of economic data on

Thursday including the minutes from the Aug. 8 monetary policy

panel meeting and real GDP reading for the second quarter.

Investment bank Morgan Stanley issued an "underweight"

warning on Mexican shares on Wednesday due to concerns about

planned changes to the judiciary and electoral system, and also

downgraded forecasts for China's main markets.

A Reuters survey of market strategists also showed that the

outlook for Mexico's stocks has been hurt by weaker

prospects for the economy and investor worries about some of the

new government's planned reforms.

The Brazilian real edged 0.1% higher against the U.S.

dollar. Oil prices rose slightly, regaining some ground after

steady sell-offs driven by expectations of reduced Chinese

demand and diminishing concerns over the potential for Middle

East conflict.

The Peruvian sol jumped 0.8% against the greeback as

copper prices rebounded slightly with further gains capped by a

five-year high stockpile in warehouses monitored by LME.

Peru is likely to produce between 2.7 million and 2.8

million metric tons of copper this year, the head of a major

mining group told Reuters on Tuesday, with estimated output

falling below the government's 3 million ton goal.

Emerging market assets were set for a monthly gain but

investors were cautious ahead of the Fed minutes from its July

policy meeting at 1800 GMT and a crucial speech by Fed Chair

Jerome Powell at the Jackson Hole economic symposium on Friday.

Money markets see a 67.5% chance of a 25-basis-point rate

cut in September by the Fed, according to CME's FedWatch Tool.

The regional stocks index also slid 0.6%.

Argentina's Merval index led the losses with a 0.7%

decline ahead of data that is expected to show that ecnomic

activity likely fell in June versus the same month a year

earlier amid tough austerity measures and cost-cutting under

President Javier Milei.

"Activity in May (1.3% mom, 2.3% yoy) was the exception due

to this year's much better harvest compared to last year's poor

agricultural output which was impacted by an extreme drought,"

economists at Goldman Sachs said in a note.

Brazil's Bovespa rose 0.3% and Colombia's COLCAP

index inched up 0.1%.

Key Latin American stock indexes and currencies at 1500 GMT:

Stock indexes Latest Daily YTD %

% change

change

MSCI Emerging 1101.32 -0.28 7.79

Markets

MSCI LatAm 2315.38 -0.56 -12.56

Brazil Bovespa 136644.6 0.41 1.83

8

Mexico IPC 53904.14 -0.11 -6.07

Chile IPSA 6481.80 -0.14 4.58

Argentina MerVal 1647660. -0.7 77.22

95

Colombia COLCAP 1346.14 0.06 12.63

Currencies Latest Daily YTD %

% change

change

Brazil real 5.4745 0.20 -39.48

Mexico peso 19.2233 -1.26 2.47

Chile peso 918.7 0.66 -33.10

Colombia peso 4005.5 -0.07 -25.55

Peru sol 3.738 -0.06 -13.40

Argentina peso 944.0000 0.00 -98.03

(interbank)

Argentina peso 1335 1.50 -98.56

(parallel)