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EMERGING MARKETS-Latam FX cheers weak U.S. data; Mexican central bank awaited

    * Mexican central bank expected to hold rates
    * MSCI on Argentina in focus

    By Ambar Warrick
    June 24 (Reuters) - Mexico's peso rose on Thursday ahead of
a central bank rate decision, while other Latin American
currencies surged after middling U.S. labor data dispelled some
concerns over immediate policy tightening by the Federal
Reserve. 
    The peso rose about 0.7%, with the Mexican central
bank widely expected to stand pat on rates. But the bank's
guidance on policy will be closely watched, given a recent rise
in inflation.
    Data on Thursday showed consumer prices in the first half of
June rose more than expected, while a separate reading showed
Mexico's jobless rate declined in May.
    "The bank will likely highlight the recent upside inflation
surprises, noting that they have largely been related to the
increase in prices of energy items and the bottlenecks related
to reopening of the economy," Credit Suisse analysts wrote in a
note to clients. 
    But with core inflation- which strips away volatile food and
energy items- also rising, analysts speculated that the bank may
have a more hawkish than expected statement. 
    While the peso had benefited from relatively higher rates at
the start of the year, hikes in regional peer Brazil, as well as
a cut in Mexican lending rates in February, diminished the
peso's appeal for carry trade. 
    
     Brazil's real rose 0.6%, while Chile's peso
led gains across Latam with a 1% jump, as minutes of the Chilean
central bank's recent meeting showed it had mulled raising
interest rates.
    Sentiment toward emerging markets improved after U.S. weekly
jobless claims fell much less than expected, while new orders
for U.S.-made capital goods unexpectedly fell in May.

    The data eased some fears over imminent policy tightening by
the Fed, given that the labor market is a major factor for the
bank to consider halting its massive stimulus program. 
    Latam stocks also rose, with MSCI's index of regional stocks
 rising 0.9% and outpacing the broader emerging
market index.
    Focus was also on Argentine markets, with index provider
MSCI expected to provide an update after the U.S. market close
on whether Argentina can remain part of its benchmark emerging
market index.  
    If not, the country's assets will face relegation to
frontier markets or standalone status. Ejection from the MSCI
emerging market index could also result in outflows of $610
million from Argentinian stocks, JPMorgan calculated.  
    
    Key Latin American stock indexes and currencies:
    
                              Latest      Daily % change
 MSCI Emerging Markets         1366.66                0.45
                                        
 MSCI LatAm                    2673.04                0.92
                                        
 Brazil Bovespa              129037.33                0.47
                                        
 Mexico IPC                   50106.51               -0.13
                                        
 Chile IPSA                    4387.92                 0.4
                                        
 Argentina MerVal             66167.57               0.117
                                        
 Colombia COLCAP               1265.05                1.45 Currencies             Latest      Daily % change
 Brazil real                    4.9317                0.64
                                        
 Mexico peso                   20.0210                0.72
                                        
 Chile peso                      727.9                1.05
                                        
 Colombia peso                 3770.63                0.28
 Peru sol                       3.9748                0.10
                                        
 Argentina peso                95.5500               -0.01
 (interbank)                            
                                        
 

    
 (Reporting by Ambar Warrick; Editing by Dan Grebler)
  
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