EMERGING MARKETS-Latam currencies rise as dollar slides after U.S. manufacturing data

By Susan Mathew Aug 1 (Reuters) - Latin American currencies rose on Monday, with Brazil's real giving up session losses, as the dollar slipped following data that signalled U.S. inflation has probably peaked. U.S. manufacturing activity slowed less than expected in July and there were signs that supply constraints are easing, with a gauge of prices paid for inputs by factories falling to a two-year low. The data lent weight to bets that the U.S. Federal Reserve might not be more aggressive than anticipated at its September meeting, denting the dollar. The Mexican peso was up 0.2%. The currency has risen for five of the last six sessions. As copper prices rose, top exporter of the red metal, Chile, saw its peso rise 1.0%, as did crude exporter Colombia's currency despite falling oil prices. The Colombian currency extended gains made after the central bank hiked on Friday by 150 bps to 9% as expected. Colombia's government on Friday formally proposed to Congress a 2023 budget of 391.4 trillion pesos ($89.5 billion), 11.7% higher than this year's. The bill, which must be approved by Congress before Oct. 20, includes proposed investment of 62.8 trillion pesos in 2023. Brazil's real was flat after falling up to 0.4% during the session. Brazil's central bank is seen delivering a second consecutive 50 basis points hike on Wednesday, bringing the benchmark interest rate to 13.75%. The bank's aggressive moves since March last year has helped the currency surge 7.5% so far this year, faring better than a 0.7% rise for its regional peer, the Mexican peso, and far outperforming an over 4% slide for the emerging markets currencies index. Robin Brooks, the International Institute of Finance's chief economist, said the real remains "hugely undervalued" given Brazil's significant trade surplus, assigning the currency a fair value of $4.50, representing a more than 10% upside to current levels. But volatility is seen rising ahead of presidential elections in October. Meanwhile, a document seen by Reuters showed that a Luxembourg bailiff has ordered banks to freeze assets held by Ecuador in accounts in the country as a result of a dispute over a $391 million settlement award that Anglo-French oil company Perenco says remains unpaid. Stocks in Latin America fell, in line with U.S. stocks. A slew of worrying factory activity data from across the globe, especially from China, reinforced recession fears. But Beijing's promise that market stability is top priority, helped Chinese markets end higher, lifting broader emerging market shares . Key Latin American stock indexes and currencies at 1424 GMT: Stock indexes Latest Daily % change MSCI Emerging Markets 994.78 0.1 MSCI LatAm 2126.82 -0.02 Brazil Bovespa 102808.28 -0.35 Mexico IPC 48029.70 -0.24 Chile IPSA 5252.55 -0.11 Argentina MerVal 122215.01 -0.256 Colombia COLCAP 1278.48 -1.35 Currencies Latest Daily % change Brazil real 5.1715 0.01 Mexico peso 20.3213 0.14 Chile peso 893.2 0.65 Colombia peso 4225.6 1.23 Peru sol 3.921 -0.28 Argentina peso 131.9000 -0.47 (interbank) (Reporting by Susan Mathew in Bengaluru; Editing by Marguerita Choy)