EMERGING MARKETS-Latam FX firm as dollar retreats ahead of Fed assessment

    * Fed update on U.S. economy awaited; statement at 1800 GMT
    * Brazil posts steepest monthly deflation since 1998
    * Mexican economy likely shrank 17% in April -finance
    * OECD sees deepest peacetime slump in a century

    By Susan Mathew
    June 10 (Reuters) - Latin American currencies firmed on
Wednesday as the dollar retreated ahead of a U.S. Federal
Reserve meeting that is being watched for an assessment of the
health of the world's largest economy.
    Investors are waiting to see if the Fed reinforces the
upbeat tone of economic recovery set by the latest unemployment
data. Amid speculation that it might take measures to curb a
recent steepening of the U.S. yield curve, the greenback
weakened broadly.
    A Fed statement is expected at 1800 GMT, followed by a news
conference by Fed Chair Jerome Powell. 
    Brazil's real gave back some early gains after data
showed the country posted its steepest monthly deflation since
1998 as the coronavirus outbreak slammed fuel and air travel 
prices. This raised bets of another interest rate cut further
into record low territory next week.
    After a pullback on Tuesday, Mexico's peso rose 0.3%.
The Mexican economy most likely shrank 17% in April and will
probably contract "a little less" in May, the finance minister
said, as officials further re-open the country after more than
two months of lockdown.
    "Economic recovery is likely to be very slow," said You-Na
Park-Heger, an analyst at Commerzbank, citing policy uncertainty
by the government and likely interest rate cuts as risks for the
    The Organisation for Economic Cooperation and Development
expects the global economy to contract 6% this year, the biggest
peacetime downturn in a century, before it emerges next year
from a recession.
    The Colombian peso rose 0.2%, while surging copper
prices sent Chile's peso up almost 1%.
    As a Friday deadline approaches, Argentina's $65 billion
debt restructuring is being closely watched, with the government
and its creditors in a sensitive final stretch to strike a
breakthrough. Citigroup strategists expect yet another extension
of the deadline as the government prepares a second amended
    Key Latin American stock indexes and currencies at 1322 GMT:
  Stock indexes           Latest   Daily %
 MSCI Emerging Markets    1014.91     0.52
 MSCI LatAm               2118.81     0.54
 Brazil Bovespa          96980.27     0.24
 Mexico IPC                     -        -
 Chile IPSA                     -        -
 Argentina MerVal               -        -
 Colombia COLCAP                -        -
      Currencies          Latest   Daily %
 Brazil real               4.8730     0.29
 Mexico peso              21.8321     0.32
 Chile peso                 763.3     0.85
 Colombia peso            3651.24     0.15
 Peru sol                       -        -
 Argentina peso           69.2500    -0.12
 (Reporting by Susan Mathew in Bengaluru;)