*

Latam stocks down 0.3%, FX flat

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Argentine authorities probe Milei official over bribery

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Brazil's consumer confidence down to 86.2 in August

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Mexico posts Q2 current account surplus of $206 mln

(Updates with afternoon trading levels)

By Pranav Kashyap and Sukriti Gupta

Aug 25 (Reuters) - Most Latin American currencies and

stocks gave back gains on Monday, following a strong run in the

previous session, while Argentine assets fell amid government

corruption allegations.

Argentina's international dollar bonds fell as corruption

allegations threatened to embroil figures close to President

Javier Milei, with the 2038 issue down as much as over 4 cents

in the session. It was last down 2.4 cents on the dollar.

Stocks in Buenos Aires slumped 3.6% - hitting an

over one-month low, while the peso lost 2.7%, set for

its worst day in nearly a month.

Argentine authorities conducted raids across multiple

properties in connection with an alleged kickback scheme that

could implicate senior government officials, according to local

media reports.

The controversy comes at a sensitive moment for Milei, who

is already grappling with legislative setbacks in Congress with

midterm elections looming in October.

The Mexican peso nudged 0.5% lower, and stocks

fell 0.8%.

Mexico's economy posted a current

account surplus

of $206 million during the second quarter, reversing a

deficit of $911 million in the same period last year, the

central bank said.

Currencies in Chile and Colombia slipped

0.7% and 0.3% respectively, as the dollar index bounced

back on the day, up 0.7%.

Powell, on Friday, cracked the door open to a September rate

cut that pinned the dollar at a four-week low as markets price

in roughly 52 bps of easing by year-end, according to LSEG data.

Expectations of lower U.S. rates have weighed on the

dollar, already down nearly 10% this year. It could revive its

role as a preferred funding currency for carry trades in

countries with historically high interest rates like Brazil.

"Jerome Powell's "all clear" signal for rate cuts turned

a down week for stocks into a gain, but now the discussion will

likely turn to how aggressive the Fed may be," said Chris

Larkin, managing director, trading and investing, E*TRADE at

Morgan Stanley.

On the flip side, Brazil's real rose 0.2%, an

outlier, while stocks hit an over one-month high, last

up 0.1%.

Data showed Brazilian

consumer confidence fell again in August in another

indication that the economy was losing steam under the weight of

the 15% Selic rate.

However, Brazilian private economists polled weekly by the

central bank lowered their forecast for 2027 inflation, ending a

six-month plateau.

MSCI's gauge tracking Latin American currencies

was flat after registering its biggest one-day

rise in four months on Friday. It hit a record high earlier in

the session.

A similar gauge for regional equities

lost 0.3% after logging its best day in over five months on

Friday.

Stocks in Bogota slipped 0.3%, while ones in Chile

advanced 0.5%.

Key Latin American stock indexes and currencies:

MSCI Emerging Markets 1283.9 1.37

MSCI LatAm 2366.49 -0.33

Brazil Bovespa 138097.76 0.09

Mexico IPC 58739.56 -0.82

Chile IPSA 8897.82 0.49

Argentina Merval 2025190.6 -3.84

Colombia COLCAP 1852.77 -0.31

Brazil real 5.4127 0.17

Mexico peso 18.682 -0.54

Chile peso 964.47 -0.74

Colombia peso 4025.35 -0.27

Peru sol 3.5086 -0.6

Argentina peso (interbank) 1356 -2.7

Argentina peso (parallel) 1345 -3.71