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Brazil's stock index at record high

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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 around 1% each

(Updated at 2:50 p.m. ET/ 1850 GMT)

By Shubham Batra and Ankika Biswas

Aug 21 (Reuters) -

Mexico's peso dropped over 2% against the dollar on

Wednesday, leading losses among Latin American currencies as

commodity prices fell sharply, while investors also assessed

minutes from the U.S. Federal Reserve's July policy meeting.

MSCI's Latin American index for currencies

fell nearly 1% to an over one-week low, as the Mexican peso

fell for a third straight day to a two-week low, ahead of

a slew of economic data and minutes from the U.S. central bank's

last meeting.

Investment bank Morgan Stanley issued an "underweight"

warning on Mexican shares, citing concerns about planned changes

to the judiciary and electoral system.

Mexico's main stock index fell 0.5% to a one-week

low.

The Fed's

minutes

, released on Wednesday afternoon, showed policymakers last

month strongly leaned toward cutting interest rates in

September, and several would have even been willing to

immediately ease borrowing costs.

"While the weak July Employment Report released since

then might cause some Fed officials to lean toward a 50-bps

move, for now we judge that a 25-bps cut remains the most likely

outcome," said Stephen Brown, deputy chief North America

economist at Capital Economics.

Market participants see a nearly 64% chance of a 25

basis point cut in September.

Fed Chair Jerome Powell's speech at the Jackson Hole

Economic Symposium on Friday will be watched for further clues

on the interest rate outlook.

Among other major currencies, Colombia's peso

fell 0.7% against the dollar, tracking sharp declines in

oil prices

, while Peru's sol and the Brazilian real

slipped 0.3% and 0.1%, respectively.

Bucking the weak trend, Chile's peso gained

nearly 1% to hit a one-month high.

The MSCI index for Latam stocks also fell

nearly 1%, dragged by an over 2% drop in Argentine equities

after a nine-day winning streak.

Data from Argentina, due later on Wednesday, is expected

to show economic activity likely fell in June from a year ago

amid tough austerity measures and cost-cutting under President

Javier Milei.

Brazil's benchmark stock index hit a fresh record

high, outperforming all its major regional peers.

Key Latin American stock indexes and currencies at 1850 GMT:

MSCI Emerging Markets 1102.09 -0.21

MSCI LatAm 2307.89 -0.88

Brazil Bovespa 136579.49 0.36

Mexico IPC 53749.52 -0.39

Chile IPSA 6483.16 -0.12

Argentina Merval 1625981.4 -2.007

Colombia COLCAP 1344.06 -0.1

Brazil real 5.4814 -0.06

Mexico peso 19.3589 -1.99

Chile peso 914.35 0.98

Colombia peso 4029.5 -0.67

Peru sol 3.7442 -0.29

Argentina peso (interbank) 943.5 0.052994171

Argentina peso (parallel) 1340 1.119402985