EMERGING MARKETS-Vale output cut drags Latam stocks lower; Chile's peso jumps

* Petrobras set to cut gasoline prices; stock slips * Dollar resumes relentless ascent * Ukraine proposes 2-year debt freeze on most of its bonds By Anisha Sircar July 20 (Reuters) - Brazilian stocks dragged Latin American shares lower on Wednesday after Vale, one of the world's largest miners, slashed its iron ore production forecast for 2022, while Chile's peso jumped for a fourth straight day, breezing past a firmer dollar. Heavyweight Bovespa shares fell 1%, dragged lower by Vale SA's 3% slump after the miner cut its iron ore output forecast on Tuesday due to the sale of its Center-West system assets, supply chain restrictions in its Northern system and lower market prices. The greenback rose 0.2% to 106.92. It hit 109.29 last week, a level not seen since September 2002. The strength in the dollar on rising U.S. interest rates and global growth fears has sparked a rout in Latam currencies, which are down nearly 2% on the month. Chile's peso led gains for a fourth consecutive session, trading at 915 to the dollar following an intervention by the South American nation's central bank last week that has sent the languishing currency up nearly 15% since then. "We think the year's high is already in for USDCLP - however, we do expect USDCLP to make another move back up toward 1000," BMO Capital Markets analysts Greg Anderson and Stephen Gallo said. A nearly 2% jump in the price of copper, which is Chile's top export, also supported the peso. The dollar could drift lower next year as the U.S. rate hiking cycle abates, Anderson and Gallo added. "However, for USDCLP, we don't expect much relief ... in recognition of a political situation that will continue to require a larger risk premium than in the past and a balance of payments position that will continue to be challenged by Chile's undiversified export basket." Strong U.S. earnings boosted risk appetite and eased some recession fears earlier in the session, but fresh uncertainties stemming from the Ukraine crisis and gas supplies overtook the improved market mood. Ukraine launched a formal consent solicitation to holders of its international bonds, proposing a two-year debt freeze on most of its bonds and giving creditors until Aug. 9 to vote on the proposal. Brazil's real slipped 0.3% in choppy trade. Petrobras fell 0.1% after it said it will reduce gasoline prices at its refineries by about 5%, marking the state-run oil company's first price cut since late 2021 and prompting analysts to review their inflation projections for Brazil. Meanwhile, the CAF-Development Bank of Latin America said it has approved $1.65 billion in financing for Brazil, Argentina, Paraguay, Peru and Trinidad and Tobago. Key Latin American stock indexes and currencies at 1430 GMT: Stock indexes Latest Daily % change MSCI Emerging Markets 986.55 0.67 MSCI LatAm 1974.47 -1.09 Brazil Bovespa 97357.26 -0.9 Mexico IPC 47155.43 -0.22 Chile IPSA 5123.36 -0.71 Argentina MerVal 106521.21 -0.62 Colombia COLCAP 1303.01 1.66 Currencies Latest Daily % change Brazil real 5.4259 -0.16 Mexico peso 20.5145 0.01 Chile peso 918 0.84 Colombia peso 4310.85 0.05 Peru sol 3.8567 0.12 Argentina peso 129.3800 -0.18 (interbank) Argentina peso 302 -0.33 (parallel) (Reporting by Anisha Sircar, Devik Jain and Sruthi Shankar in Bengaluru; Editing by Paul Simao)