EMERGING MARKETS-Brazil's real falls ahead of rate decision

By Susan Mathew Aug 4 (Reuters) - Brazil's real erased early gains on Wednesday in anticipation of a 100 basis-point interest rate hike, while other Latin American currencies made small moves as investors digested weak U.S. job numbers and strong services PMI. The real lost 0.6% ahead of what is expected to be a fourth straight rise in the Selic rate to 5.25% aimed at preventing this year's runaway inflation from spilling over into 2022. The decision is due at 2100 GMT. Inflation in Brazil is well over 8% - more than double the central bank's official 2021 goal. A hawkish central bank has helped the currency cut its losses made on worries over the coronavirus pandemic as well as political tensions that are expected to intensify leading up to elections next year. But the continued uncertainty about the pandemic may cause the central bank to not tighten after this hike, said Alexandra Bechtel, an EM and FX analyst at Commerzbank. Analysts at Credit Suisse expect the monetary authority to emphasize that there is no commitment to any terminal level and that its only objective is the inflation target. "The document is likely to remove the assessment that the inflation shock is temporary." PMIs on Wednesday showed activity in Brazil's services sector expanded at its fastest pace in eight and a half years in July. In the United States, the Institute for Supply Management said U.S. services industry activity jumped to a record high in July, helping the dollar cut losses after data showed U.S. private payrolls increased far less than expected in July. This turned early gains for Latam currencies to losses, with crude exporters Mexico and Colombia seeing their currencies fall around 0.1% each as oil prices slumped. Most regional stocks tracked Wall Street lower, with Brazil's second-biggest lender, Banco Bradesco, falling 3% as the lender's insurance unit took a hit from COVID-19 related claims in the second quarter. Colombian oil major Ecopetrol fell 0.7%, in line with oil prices, despite second-quarter net profit soaring to 3.72 trillion pesos ($951 million). Key Latin American stock indexes and currencies: Stock indexes Latest Daily % change MSCI Emerging Markets 1304.85 0.82 MSCI LatAm 2489.57 -0.69 Brazil Bovespa 121961.44 -1.31 Mexico IPC 51152.28 -0.93 Chile IPSA 4203.98 -0.07 Argentina MerVal 66065.05 0.291 Colombia COLCAP 1240.32 0.39 Currencies Latest Daily % change Brazil real 5.2220 -0.63 Mexico peso 19.8831 -0.07 Chile peso 776.2 -0.10 Colombia peso 3909 -0.08 Peru sol 4.0677 -0.66 Argentina peso 96.8300 -0.02 (interbank) (Reporting by Susan Mathew in Bengaluru; Editing by Steve Orlofsky)