(Updated at 11:45 a.m. ET)

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Mexico GDP weakens, peso falls

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Commodity currencies slip as China demand worries weigh

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Mexican stocks on track for first rise in five sessions

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Venezuela protests in focus

By Lisa Pauline Mattackal

July 30 (Reuters) - Mexico's peso led broader declines

in Latin American currencies after weaker-than-expected economic

data, while worries about commodity demand in China and caution

ahead of a bevy of key central bank decisions weighed on

sentiment.

Mexico's economy grew 0.2% in the second-quarter, where

analysts had expected a rise of 0.4%.

Slowing growth in Latin America's largest economy fueled

expectations for the central bank to cut interest rates at its

August meeting, weighing on Mexico's peso which fell

0.8%to 18.7924 per dollar, its lowest in nearly seven weeks.

"Going forward, real activity is likely to face headwinds

from high rates, post-election policy uncertainty, negative

fiscal impulse, soft business confidence, and moderate external

demand," economists at Goldman Sachs wrote.

Worries about commodity demand from China, the world's

second-largest economy, also weighed on producers in Latin

America, after there were no specific new stimulus efforts

announced at the country's Politburo meeting.

Oil slumped to its lowest since June, while major metals

including iron ore and copper also lost ground.

Trading was also cautious ahead of the U.S. Federal

Reserve's policy decision on Wednesday, with investors watching

for a dovish tone from policymakers to gauge whether market bets

on a September rate cut are on the right track.

Chile's peso dipped 0.5% ahead of the scheduled start of

Banco Central de Chile's policy meeting. The central bank is

forecast to ease policy by 25 basis points.

Rate decisions from both Colombia and Brazil are also on

deck tomorrow. Colombia is expected to ease policy from 11.25%

to 10.75%, while Brazilian policymakers are expected to hold

borrowing costs again.

Rate trajectories in the region highlight the challenges

facing central banks in the region as they balance the need to

boost economic growth with an uncertain global macroeconomic

scenario and higher-for-longer rates in major developed

economies such as the U.S.

The Colombian peso lost 0.5% while Brazil's real

was down 0.6%.

"A conservative central bank has kept the BRL's monetary

fundamentals steady, but some risks emerge in H2 2024 if the BCB

becomes structurally more dovish," said Thierry Wizman, global

FX & rates strategist at Macquarie.

Currencies of copper producers fell, with Peru's sol

down 0.1%, while Chile's peso briefly touched

its lowest since May.

MSCI's indexes tracking the region's stocks

and currencies fell 0.5% and 0.2%, respectively.

Local bourses were mixed, with Brazil's Bovespa down

0.6% while Argentina's Merval slipped to a two-week low.

Mexican stocks rose 0.8%, snapping five sessions of

losses.

Commodity price declines dragged Brazil's Vale

and Petrobras which lost 1.8% and 1%, respectively.

Venezuelan politics remained in focus, with protests

spreading throughout the country after Nicolas Maduro was

announced the winner of its presidential election despite the

opposition claiming victory.

Venezuela's bonds were

broadly steady after declines on Monday.

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options trading frenzy

Key Latin American stock indexes and currencies at 11:45

a.m. ET:

Latest Daily %

change

MSCI Emerging Markets 1071.77 -0.51

MSCI LatAm 2169.65 -0.45

Brazil Bovespa 126199.58 -0.59

Mexico IPC 52890.96 0.71

Chile IPSA 6486.10 0

Argentina MerVal 1453926.78 -1.844

Colombia COLCAP 1337.63 -0.23

Currencies Latest Daily %

change

Brazil real 5.6496 -0.44

Mexico peso 18.7924 -0.88

Chile peso 958.2 -0.53

Colombia peso 4083.3 -0.58

Peru sol 3.7318 -0.28

Argentina peso 931.5000 0.05

(interbank)

Argentina peso (parallel) 1370 3.28