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EMERGING MARKETS-Latam stocks hit over three-week peak on Mexico, Brazil gains

(Recasts throughout; updates prices, adds graphic, quote on Brazil) By Aaron Saldanha May 30 (Reuters) - An index of Latin American stocks rose on Thursday, aided by gains among Mexican stocks on optimism around its trade deal with Canada and the United States, while most Latin American currencies softened marginally against the dollar.

Sentiment towards Mexico warmed with President Andres Manuel Lopez Obrador saying the government will send the trade deal known as the United States-Mexico-Canada Agreement to the country's senate to execute the ratification process.

MSCI's index of Latin American stocks hit a more than three-week high and was last up 1.2%, while its Latin American currencies index gained 0.5%.

Mexican stocks rose 0.8%, largely on gains among financials and materials, while the peso ticked firmer.

Regional SAB de CV rose 4.8%, while fellow lender Gentera SAB de CV added 4.1%.

Lopez Obrador also said the Mexican economy could grow 2 percent this year, a day after the central bank said the economic outlook was uncertain and trimmed its 2019 growth forecast.

Sao Paulo-traded shares rose 0.7%, as gains among financials helped overcome losses among energy stocks.

Banco Bradesco SA's common shares rose 1.4%, matching the gain seen by its preferred stock.

Common shares and preferred shares of Petroleo Brasileiro SA (Petrobras) dipped 0.2% and 1.3%, respectively, hurt by a steep decline in Brent crude futures .

The state-run oil firm said it received an information request from the U.S. Commodity Futures Trading Commission about its trading activities after prosecutors found evidence of fraud in deals with major traders.

Brazil's real failed to gain ground against the dollar as data confirmed fears the economy shrank in the first quarter, for the first time since 2016.

Economy Minister Paulo Guedes said the contraction was no surprise, adding he was confident of recovery only if fiscal and economic reforms are implemented. Investors have been on the lookout for the progress of a proposal to reform Brazil's bloated pension system.

"The weak pace of investment is not a problem of monetary policy calibration, but a reflection of a number of difficulties and uncertainties damaging the business environment and clouding the economic outlook," Mauricio Oreng, Rabobank's senior Brazil strategist, wrote in a note, adding "the mounting fiscal problems play a key role." Argentina's stocks tacked on 1.2%, while the peso weakened 0.4%.

Buenos Aires-traded equities have been resounding out-performers among their Latin American peers this month, recovering ground lost in a 11.6% slide during April.

Colombia's peso softened 0.3%, while stocks held an even keel. Oil firm Ecopetrol SA fell 2.1% on the back of the 4% drop in Brent crude futures.

Latin American stock indexes and currencies at 1912 GMT Stock indexes daily % Latest change MSCI Emerging Markets 994.06 0.87 MSCI LatAm 2678.58 1.24 Brazil Bovespa 97251.48 0.71 Mexico IPC 43209.11 0.83 Chile IPSA 4937.77 1.25 Argentina MerVal 34360.49 1.16 Colombia IGBC 12061.71 -0.01 Currencies daily % change Latest Brazil real 3.9761 -0.02 Mexico peso 19.1107 0.09 Chile peso 709.2 -0.69 Colombia peso 3362.98 -0.38 Peru sol 3.365 -0.30 Argentina peso (interbank) 44.5000 -0.07 (Reporting by Aaron Saldanha in Bengaluru; Editing by Sandra Maler)