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EMERGING MARKETS-Mexican peso recovers from c.bank reshuffle, Peru's sol slides

 (Adds details, updates prices throughout)
    By Susan Mathew and Shreyashi Sanyal
    June 10 (Reuters) - Emerging market currencies were trading
mixed for the day on Thursday, with Mexico's peso recovering
from a fall after a central bank leadership change and the
Peruvian sol falling as socialist Pedro Castillo maintained a
slim lead over rival Keiko Fujimori. 
    Markets also shrugged off U.S. inflation for May, which rose
more than expected, but not enough to for the Federal Reserve to
change its loose monetary policy, analysts said. The European
Central Bank kept stimulus taps wide open at its meeting.

    "It is eye-popping but it's important to consider where we
are versus a year ago," said Scott Brown, chief economist at
Raymond James in Florida. "I don't think there is any reason for
the Fed to panic."
    MSCI's index of EM currencies was flat with 
Brazil's real reversing early gains as attention turned
to next week's central bank meeting. Analysts increasingly see a
rate hike to control inflation, which would make the currency an
attractive high yielder for carry trade.
    "Economic optimism and the hope that the Brazilian central
bank would more than partially normalise the key interest rate
have again significantly boosted the BRL appreciation last
month," said Commerzbank's EM FX analysts. 
    "However, we remain cautious in view of country-specific
risks," they said, citing the possibility of President Jair
Bolsonaro taking non-conventional decisions in the run-up to
presidential elections next year. 
    Stocks in Sao Paulo were also lower by afternoon
trading. 
    Mexico's peso erased early losses after a reshuffle
of the central bank governor and finance minister on Wednesday,
to rise 0.2%. 
    Mexican Finance Minister Arturo Herrera was tapped on
Wednesday by President Andres Manuel Lopez Obrador to lead the
central bank, while economist Rogelio Ramirez de la O, a close
ally, was appointed finance minister.
    "Banxico's Board shall become more dovish," strategists at 
Citi Research said, adding that they do not expect that many
changes on the fiscal front.
    The moves come after the ruling party lost some of its
majority in the lower house of Congress, making it harder to
pass proposed reforms that could alter market-friendly policies.
 
    Peru's sol slipped 1% as investors looked for more
news on the progress of presidential vote counting. Socialist
Castillo maintained a slight lead, although rival conservative
Fujimori contested several ballots. 
    Chile's peso edged higher after a central bank poll
showed the Chilean economy surged 15.2% in May and 14.7% in the
second quarter. 
    
    Key Latin American stock indexes and currencies: 
    
         Stock indexes                  Latest    Daily %
                                                  change
 MSCI Emerging Markets                   1379.77     0.51
 MSCI LatAm                              2674.21     0.07
 Brazil Bovespa                        130265.91    -0.28
 Mexico IPC                             51009.68     0.17
 Chile IPSA                              4259.12    -0.22
 Argentina MerVal                       68200.27     0.14
 Colombia COLCAP                         1255.34        0
                                                         
             Currencies                 Latest    Daily %
                                                  change
 Brazil real                              5.0718    -0.04
 Mexico peso                             19.6931     0.19
 Chile peso                                720.8    -0.26
 Colombia peso                           3601.85    -0.41
 Peru sol                                 3.8847    -1.26
 Argentina peso (interbank)              95.0900    -0.03
                                                  
 Argentina peso (parallel)                   154     1.30
                                                  
 
 (Reporting by Susan Mathew and Shreyashi Sanyal in Bengaluru;
Editing by Nick Macfie and Alistair Bell)
  
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