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EMERGING MARKETS-Brazil's real leads Latam FX losses

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* Brazil industrial production unchanged in June * Carry trade potential keeps Mexican peso buoyed * Peru's Velarde amenable to stay on as cenbank chief By Susan Mathew Aug 3 (Reuters) - Brazil's real dropped 1.6% on Tuesday on flat industrial production data and led declines across most Latin American currencies, while Mexico's peso attempted to edge back towards four-week highs. The real hit its lowest in two weeks after data showed industrial production was unchanged in June from the previous month, with output falling in three of the four main economic categories and 14 of the 26 sectors surveyed. "The stagnation in Brazilian industrial production in June suggests that industry made a negative contribution to quarter-on-quarter GDP growth over the second quarter as a whole," said William Jackson, chief EM economist at Capital Economics. "But with virus cases having fallen sharply, it looks like the prospects for industry – and the economy more generally – are brightening." Most other currencies fell, tracking commodity prices as sentiment was held in check by fears of a hit to a nascent global economic recovery from a rise in COVID-19 cases, especially in other parts of Latam and Asia, as the Delta variant spreads. Carry trade appeal kept Mexico's peso buoyed, rising for the eighth session in 10 and helping it edge into positive territory for the year. A hawkish central bank has helped keep prospects for the peso from falling. Peru's sol extended losses to a fourth straight session to hit yet another low against the dollar as political uncertainty prevailed after the appointment of a far-left prime minister and a moderate finance minister. Peruvian central bank President Julio Velarde, a highly respected central banker, appears amenable to a proposal to stay in his role under the new government, the economy ministry said. Most Latam stocks fell, with oil major Petrobras weighing the most on Brazil's Bovespa index as crude prices fell. The index hit a 2-1/2 month low, down 1%. Key Latin American stock indexes and currencies at Stock indexes Latest Daily % change MSCI Emerging Markets 1291.91 -0.09 MSCI LatAm 2474.79 -1.84 Brazil Bovespa 121249.29 -1.03 Mexico IPC 51107.63 0.47 Chile IPSA 4203.04 -0.18 Argentina MerVal 65660.29 -0.424 Colombia COLCAP 1232.09 -0.32 Currencies Latest Daily % change Brazil real 5.2499 -1.63 Mexico peso 19.8793 0.08 Chile peso 773.7 -0.75 Colombia peso 3917.4 -0.76 Peru sol 4.0782 -0.53 Argentina peso 96.8100 -0.01 (interbank) (Reporting by Susan Mathew in Bengaluru; Editing by Dan Grebler)

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