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EMERGING MARKETS-Brazil, Mexico currencies slip, Latam stocks mostly gain

By Susan Mathew

(Updates prices) By Susan Mathew June 24 (Reuters) - Mexico's peso and the Brazilian real fell on Monday, while most other Latin American currencies firmed against a weaker dollar as investors awaited the G20 summit where the U.S. and Chinese presidents are expected to meet to revive trade talks. Argentina's peso rose 0.9% as the dollar weakened on bets the Federal Reserve may cut interest rates more than once this year, while currencies in Chile and Peru gained 0.1% and 0.4% respectively, with Chile's peso on track to post gains for a fifth straight session. Investors are watching for the outcome of a meeting between U.S. President Donald Trump and his Chinese counterpart Xi Jinping on the sidelines of the G20 summit that begins on Friday, when they are expected to revive trade discussions. "We anticipate that a pledge to return to negotiations will be more likely - an outcome that should continue to support risk in the coming weeks and exacerbate USD momentum to the downside," wrote Mazen Issa, a senior FX analyst at TD Securities. Brazil's real fell 0.1% after four days of gains, while Mexico's peso slipped 0.3%, in a week that will culminate in a Bank of Mexico interest rate meeting on Friday. "We expect little dovish bias from Banxico due to developments in the core inflation and inflation expectations complex," wrote Sacha Tihanyi, deputy head of emerging markets strategy at TD. "Any dovish messaging will come via the growth outlook, however these concerns will not dominate inflation expectations and core price dynamics, which currently do not imply rates cuts at this point in time," he said, adding that an unexpectedly dovish statement may push fixed income inflows and bolster the currency. Data on Monday showed that Mexican inflation rose at a slightly slower-than-expected pace in the first half of June. Another set showed the country's economy grew only slightly in April, and contracted by 1.4 percent compared to a year ago. In Brazil, a central bank survey showed that the outlook for Brazil's economy continued to deteriorate. Separate data showed that the current account swung back into surplus from a deficit the prior month, albeit below expectations. May foreign capital flows, however, rose to the highest in years. Among stocks, Argentine shares slipped 0.6%, while those in Chile and Mexico gained. Brazil shares traded flat, having scaled fresh life highs earlier in the session. Airline stocks Gol Linhas and Brazil listed shares of Azul SA lost 0.1% and 0.8%, respectively. Brazil's antitrust regulator said it wants new rules for allocating airplane landing and departure rights in Sao Paulo's crowded domestic airport, saying they are too concentrated among two main airlines - LATAM Airlines and Gol. LATAM Airlines shed almost 1%. Markets in Colombia were closed for a local holiday. Key Latin American stock indexes and currencies at 2003 GMT: Stock indexes Latest Daily % change MSCI Emerging Markets 1054.06 0.08 MSCI LatAm 2876.74 -0.09 Brazil Bovespa 102100.01 0.09 Mexico IPC 43727.09 0.46 Chile IPSA 5092.48 0.64 Argentina MerVal 40053.77 -0.6 Currencies Latest Daily % change Brazil real 3.8263 -0.01 Mexico peso 19.1904 -0.37 Chile peso 680.6 0.46 Peru sol 3.301 -0.03 Argentina peso 42.4200 0.90 (interbank) (Reporting by Susan Mathew in Bengaluru; Editing by Susan Thomas)