*

Foreigners pour $31 billion into EM portfolios in Aug, IIF

says

*

Mexico's sweeping judicial overhaul formally takes effect

*

Peru economy expands for fourth straight month in July

*

Argentina's Milei pledges to protect fiscal balance in

budget

speech

*

Latam FX and stocks add 0.5%

(Updated at 3:20 p.m ET/ 1920 GMT)

By Ankika Biswas and Shashwat Chauhan

Sept 16 (Reuters) -

Most Latin American currencies ticked up against the dollar

on Monday as global markets awaited the U.S. Federal Reserve's

rate verdict later this week, with bets tilted toward an

outsized rate cut.

MSCI's Latam currencies index was up 0.5%,

hitting a three-week high, with the broader emerging markets

currencies gauge scaling a lifetime high. The

regional stocks index also climbed 0.5%.

Both Latam indexes had logged weekly gains on Friday, as

expectations grew that the Fed could opt for a bigger

50-basis-point cut when it meets on Sept. 17-18.

Lower U.S. rates could give EM central banks more room for

manoeuvre to ease and support domestic growth, barring the

volatility and uncertainty around November's U.S. presidential

election. Latin American countries are some of the major EMs

that have already started a rate-cut cycle before the Fed.

Brazil's real strengthened 0.9% against the dollar to

a near three-week high, with investors awaiting a likely local

rate hike and inflation data later in the week.

"In the last few weeks, inflation expectations have been

continuously worsening among investors," StoneX analysts noted.

"Such a scenario of discomfort will likely result in a

0.25 pp (percentage point) increase in the Selic rate, which, in

turn, should improve the outlook for the Brazilian interest rate

differential compared to other economies."

Mexico's peso slipped 0.4%, set to snap a three-day

winning streak. The local equity market was closed on account of

Independence Day.

Mexico's judicial reform overhauling the country's courts,

which will allow voters to elect judges, officially took effect

on Sunday.

Chile's peso rose 0.5% against the dollar, boosted by

strong copper prices, while Colombia's peso dropped 1.2%.

Peru's sol edged up 0.1%. Data showed Peru's economy

expanded for the fourth month in a row in July fueled by all

sectors except agriculture, continuing the country's recovery

following a recession last year.

In Argentina, President Javier Milei said during a

presentation to Congress on Sunday on the 2025 budget that he

would defend his government's commitment to maintaining fiscal

balance and veto all bills that threaten it.

Meanwhile, data from a banking trade group showed foreign

investors ploughed a net $30.9 billion into EM stocks and debt

portfolios in August.

HIGHLIGHTS

**

Petrobras' new strategic plan to have greater focus on oil

and gas, CFO says

** Israel shekel and shares slide on talk, denied by PM,

that Netanyahu may sack defence minister

Key Latin American stock indexes and currencies:

MSCI Emerging Markets 1086.56 0.39

MSCI LatAm 2260.23 0.51

Brazil Bovespa 134974.23 0.07

Mexico IPC 52016.85 0.03

Chile IPSA 6349.18 -0.03

Argentina Merval 1822577.2 0.266

1

Colombia COLCAP 1317.83 0.47

Brazil real 5.5125 0.93

Mexico peso 19.2635 -0.4

Chile peso 921.4 0.5

Colombia peso 4234.21 -1.19

Peru sol 3.7673 0.12

Argentina peso (interbank) 960 -0.052083333

Argentina peso (parallel) 1255 0.796812749