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Mexican judicial overhaul passes first hurdle in committee

vote

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Brazil inflation slows in August

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Brazil's Vale rises after Gustavo Pimenta named next CEO

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Latam stocks down 0.9%, FX down 0.6%

(Updated at 1927 GMT/3:27 pm ET)

By Shashwat Chauhan and Lisa Pauline Mattackal

Aug 27 (Reuters) - The Mexican peso weakened nearly 2%

on Tuesday as lawmakers pushed forward with a controversial

judicial reform plan, while other Latin American currencies were

also weaker amid declines in commodity prices and worries about

escalating geopolitical tensions.

Mexico's currency depreciated 1.7%, hitting a more

than three-week low of 19.726 per dollar, after lawmakers

approved in a committee vote a controversial judicial reform

late on Monday, paving the way for a final debate when the newly

elected Congress begins its term next month.

The proposed reform, proposed in February by outgoing

President Andres Manuel Lopez Obrador, calls for the popular

election of over 7,000 judges and magistrates, including Supreme

Court justices and has been a source of concerns for investors.

Meanwhile, Brazil's real edged 0.1% lower after data

showed consumer price inflation slowed this month, adding to

uncertainty about the central bank's interest rate decision next

month after it recently adopted a more hawkish and

data-dependent policy stance.

"The continuation of above-trend real activity amidst robust

job creation and wage growth is moving the policy needle toward

rate hikes, despite a more favorable external monetary policy

backdrop," economists at Goldman Sachs wrote in a note.

MSCI's indexes for Latin American currencies

fell 0.6%, while a gauge of regional stocks

lost 0.9% each.

Colombia's peso slipped 0.3% as prices of crude oil,

one of the country's top exports, fell more than 2% after

spiking on Monday, while Chile's peso lost 0.2%.

Shares of oil companies fell, with Brazil's Petrobras

down 1.3%, and Colombia's Ecopetrol losing

0.7%.

Most Latin American currencies saw sharp gains at the end of

last week when Federal Reserve Chair Jerome Powell said on

Friday "the time has come" to lower interest rates, pushing the

dollar to its lowest level so far this year.

However, typically risk-on emerging market assets have

paused for breath so far this week, as investors measured the

risks of escalating geopolitical worries in the Middle East and

looked ahead to key economic data in the U.S. for more clues on

the interest rate trajectory.

Hezbollah had launched hundreds of rockets and drones at

Israel early on Sunday, and Israel's military said it struck

Lebanon with around 100 jets to thwart a larger attack.

Shares of Vale gained 3.5% after the miner said

that current Chief Financial Officer Gustavo Pimenta will become

its next Chief Executive Officer.

Brazil's Bovespa stock index edged up 0.1%,

while Mexican stocks fell 0.7% to an over two-week low.

HIGHLIGHTS

** Pakistan eyes $4 bln from Middle East banks to plug

financing gap, says central bank chief as per a Reuters report

** Mexico central bank has growing inflation challenge:

extortion

** GRAPHIC-Foreign investors ditch India's pricey stocks,

opt for new issues

Key Latin American stock indexes and currencies:

MSCI Emerging Markets 1100.6 -0.33

MSCI LatAm 2279.42 -0.86

Brazil Bovespa 137030.47 0.1

Mexico IPC 52824.21 -0.65

Chile IPSA 6381.45 -0.94

Argentina Merval 1606921.7 0.874

6

Colombia COLCAP 1341.47 -0.18

Brazil real 5.5007 -0.1

Mexico peso 19.726 -1.71

Chile peso 907.43 -0.23

Colombia peso 4033.52 -0.25

Peru sol 3.7219 0.2

Argentina peso (interbank) 948.5 0.1581444

39

Argentina peso (parallel) 1320 2.2727272

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