EMERGING MARKETS-Most Latam FX gain as dollar loses shine, Chile rate verdict on deck

* Chile rate decision due * Chile unemployment rate 8.5% in June quarter * IMF, Argentina reach staff deal on loan reviews * POLL-Brazil to kick off monetary easing with small rate cut * Brazil’s jobless rate hits lowest since 2014 By Ankika Biswas July 28 (Reuters) – Most Latin American currencies gained on Friday, as the dollar lost steam after U.S. data on easing inflation bolstered the case for the Federal Reserve to end its interest rate hikes, while focus turned to Chile’s policy decision. The MSCI index for Latam currencies rose 0.3%, poised for a third straight week of gains, with the dollar sliding after annual inflation logged its smallest increase in over two years in June, with underlying price pressures also moderating. Chile’s peso was marginally higher, likely on the back of higher copper prices, ahead of a likely 75-basis-point interest rate cut by the central bank later in the day. Data showed Chile’s unemployment rate hit 8.5% in the April-June period, below analysts’ expectations. Focus also turned to Argentina after the International Monetary Fund said it has reached a staff-level agreement to unlock $7.5 billion and complete the fifth and sixth reviews of the struggling country’s $44 billion loan program. Mexico’s peso and Colombia’s peso rose over 1% each, both on track for weekly gains, although crude oil prices inched lower but were set for a fifth straight week of gains. Colombia’s policy decision is due on Monday. Scotiabank analysts expect rates to remain steady, highlighting that the central bank’s new guidance will help assess the conditions needed to achieve before a potential rate cut. Meanwhile, a Reuters poll showed Brazil is on track for its first rate cut in three years on Wednesday, with most anticipating a small reduction despite government calls for more aggressive action. The Brazilian real, however, gained 0.8%. Investors continued to show greater optimism about the business environment, amid advancement of agendas such as the fiscal framework and tax reform in Congress and after rating agency Fitch raised the country’s sovereign credit rating along with a stable outlook. Data showed Brazil’s jobless rate during the June quarter fell to its lowest level for the period in nine years, underscoring labor market resilience, while another revealed public sector debt remained stable in June. Goldman Sachs analysts expect labor market improvement to slow in coming quarters given expectations of below-trend growth, while foreseeing consolidated public sector to go deeper into deficit in 2023 and gross debt dynamics to resume an upward trend. The MSCI index for Latam stocks gained 0.6%, also eyeing weekly gains, with Argentine and Chilean equities in the lead. Key Latin American stock indexes and currencies at 1445 GMT: Stock indexes Latest Daily % change MSCI Emerging Markets 1043.02 0.76 MSCI LatAm 2554.31 0.55 Brazil Bovespa 120105.06 0.1 Mexico IPC 55008.75 0.47 Chile IPSA 6349.65 0.49 Argentina MerVal 458515.13 1.845 Colombia COLCAP 1163.40 -0.29 Currencies Latest Daily % change Brazil real 4.7188 0.82 Mexico peso 16.6397 1.32 Chile peso 825.7 0.05 Colombia peso 3917.64 1.21 Peru sol 3.592 -0.21 Argentina peso (interbank) 273.5000 -0.15 Argentina peso (parallel) 545 1.47 (Reporting by Ankika Biswas in Bengaluru; editing by Jonathan Oatis)