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EMERGING MARKETS-Latam FX dip as dollar comes off lows ahead of Fed outcome

By Susan Mathew

(Updates prices) By Susan Mathew June 17 (Reuters) - Latin American currencies slipped on Monday, with Brazil's real giving up early gains, as the dollar came off session lows ahead of a Federal Reserve meeting later this week. The dollar steadied, hovering near the two-week highs hit earlier in the session, as investors reconsidered how dovish the Fed is likely to be after its two-day meeting set to end on Wednesday. "We don't see preemptive cuts, leaving the Fed in wait-and-see mode," wrote Mark McCormick, global head of FX strategy at TD Securities, in a note. "If the Fed can engineer a low-volume outcome this week that should reinforce the broad dollar," he said, which could hurt developing world currencies. Mexico's peso deepened its declines. Rating agency Moody's said unpredictable policymaking by the Mexican government and challenges facing debt-laden state oil firm Pemex are clouding economic and fiscal outlook for Mexico. Moody's had lowered its outlook on Mexico to negative earlier this month. Colombia's peso touched its lowest in more than one week, while a recovery in copper prices helped stem losses in Chile's peso. Copper is Chile's main export. Brazil's real gave up early gains to trade 0.16% lower ahead of the country's central bank rate decision on Wednesday. The benchmark interest rate is expected to be left unchanged, according to a Reuters poll, but it suggested that policy easing may be in the offing. On the pension reform front, Economy Minister Paulo Guedes said the bill could still be saved if lawmakers reverse some changes made to the draft last week. The changes and Guedes' criticism of it had hit markets on Friday. But lower house Speaker Rodrigo Maia said the changes will help ensure it gets majority backing in the final lower house vote and that he expects the special congressional committee to approve the bill on June 26. Stocks in Sao Paulo traded flat, in line with world stocks, as did most other regional bourses. State-run oil company Petroleo Brasileiro rose 0.6% despite a fall in oil prices. The firm said it made natural gas discoveries, which as per a report newspaper report, could help deliver the "cheap energy shock" to Brazil promised by Guedes. Planemaker Embraer SA rose on signing a contract worth $1.9 billion with United Airlines for the delivery of up to 39 E175 jets. Mining major Vale weighed the most. Iron ore prices fell after Vale said it expects to soon restore 20 million tonnes of yearly capacity at its Brucutu mine in Brazil. Markets in Argentina were closed for a local holiday. Key Latin American stock indexes and currencies at 1930 GMT: Stock indexes Latest Daily % change MSCI Emerging Markets 1011.48 -0.35 MSCI LatAm 2742.62 -0.41 Brazil Bovespa 98021.42 -0.02 Mexico IPC 43150.81 0.05 Colombia IGBC 12305.02 -0.09 Currencies Latest Daily % change Brazil real 3.9019 -0.08 Mexico peso 19.1745 -0.13 Chile peso 700.2 -0.06 Colombia peso 3281.03 -0.39 Peru sol 3.347 -0.03 (Reporting by Susan Mathew in Bengaluru; Editing by Richard Chang)