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EMERGING MARKETS-Chilean peso climbs for third straight day; Brazil's Bovespa leads Latam stocks higher

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* Mexican economy likely grew 2.1% in June on year * Chile's peso surges for third straight day (Updates prices) By Anisha Sircar and Devik Jain July 19 (Reuters) - The Chilean peso advanced for the third straight session against a retreating dollar on Tuesday, while Brazil's Bovespa led gains among the region's stock indexes boosted by shares of financials and commodity companies. Chile's peso jumped 2.2%, and has gained 13.1% in the last three sessions after last week's central bank intervention propped up the struggling currency. Brazil's real edged 0.4% higher. State-run Petrobras said it would lower gasoline prices at its refineries about 5%, its first price cut since late 2021. The move brings some relief to President Jair Bolsonaro, who is trailing former President Luiz Inacio Lula da Silva in opinion polls ahead of the October vote as high consumer prices hurt his popularity. The dollar eased from two-decade highs as markets pared bets for a 100 basis point hike by the U.S. Federal Reserve next week. The safe-haven currency has benefited this year on growing worries about a global recession. "A (recovery in EM currencies) comes on the back of very large falls last week, (but) it's going to be a challenging environment over the rest of the year if the U.S. Federal Reserve is tightening aggressively," said William Jackson, chief emerging markets economist at Capital Economics. "We've seen big swings in the Brazilian real over the past year triggered by perceived political risk, but now, a lot of that bad news is priced in, so a Lula government proving to be more moderate might help support the currency." Mexico's peso was down 0.2% after rising as much as 0.76%. The country's economy likely grew 2.1% in June from a year earlier, but activity is expected to have contracted by 0.4% last month from May, estimates from the national statistics agency showed. Inflation in Latam's second-largest economy in the first half of July likely remained at levels not seen since January 2001, a Reuters poll showed, raising bets the Bank of Mexico will raise its key rate again at its August meeting following a record 75 basis point hike in June. Argentina's peso surpassed the psychological barrier of 300 pesos per dollar in the black market earlier in the day, hitting a record low as both businesses and individuals hold on to scarce greenbacks. Resource-rich Latam currencies have come off highs hit earlier this year as a commodity boom loses steam on global growth and demand fears, while recession fears, rising interest rates and inflation have sent stocks in the region tumbling 6.8% this year. Stocks rose 0.4%, with Brazil's heavyweight Bovespa up 1.25%, boosted by 3.6% gains in lenders Itau Unibanco Holding SA and Banco Bradesco. Brazil's Embraer SA jumped 7.8% after the planemaker announced a partnership with BAE Systems PLC to expand their footprint in the global defense market. Key Latin American stock indexes and currencies at 1935 GMT: Stock indexes Latest Daily % change MSCI Emerging Markets 980.25 -0.02 MSCI LatAm 1983.59 0.41 Brazil Bovespa 98123.08 1.25 Mexico IPC 46978.11 0.12 Chile IPSA 5133.37 1.02 Argentina MerVal 106981.86 1.461 Colombia COLCAP 1298.07 1.28 Currencies Latest Daily % change Brazil real 5.4181 0.13 Mexico peso 20.5013 -0.22 Chile peso 925.7 1.86 Colombia peso 4313.2 -0.39 Peru sol 3.8615 0.77 Argentina peso (interbank) 129.1400 -0.18 Argentina peso (parallel) 296 -1.69 (Reporting by Anisha Sircar and Devik Jain in Bengaluru Editing by Alistair Bell and Richard Chang)