*

Peru's central bank expected to leave interest rates

unchanged

*

Brazil's retail sales unexpectedly rise to record high in

May

*

Latam stocks up 0.2%, FX off 0.3%

*

Kenyan president sacks cabinet, bowing to pressure from

protests

(Updated at 1535 GMT)

By Johann M Cherian

July 11 (Reuters) - Most Latin American currencies

hovered around the unchanged mark on Thursday, as investors

stayed cautious ahead of an interest rate decision in Peru and

assessed Banxico's monetary policy minutes.

MSCI's index tracking regional currencies

slipped 0.2% against a weakening dollar, after data showed that

headline U.S. consumer prices unexpectedly fell in June.

However, the dollar's slip saw the Japanese yen

jump nearly 3%, its biggest daily surge since late 2022, raising

questions about official buying of the Asian currency.

Back in resources-rich Latin America, Brazil's real

slipped 0.3%, with traders assessing retail sales data that

showed an unexpected rise to record highs, a day after data

signaled moderating price pressures for consumers.

Markets also assessed the implications of a tax overhaul

that the country's lower house approved, which aims to boost

productivity by streamlining a tax system critics blame for

burdening businesses with excessive costs.

"It is a good thing because in the past ... it was a web of

taxes and it was so complicated that it discouraged a lot of

economic activity," said Eduardo Ordonez Bueso, an emerging

markets debt portfolio manager at BankInvest.

Separately, the country's Senate Committee postponed voting

on a constitutional amendment proposal granting the central bank

greater financial autonomy from the executive.

Concerns around Brazil's fiscal standing along with central

bank independence have been among top reasons for the real

trading near two-year lows following a recent plunge in value.

The Mexican peso was flat after minutes from the

local central bank's June monetary policy meeting showed the

five-member governing board foresaw that the inflationary

environment may allow for discussing further rate cuts at

upcoming meetings.

Chile's peso and Peru's sol ticked up 0.2% and

0.8% respectively, with the currencies of both copper exporting

countries hovering near one-month highs.

Focus was on an interest rate decision by the Peruvian

central bank later in the day, where economists polled by

Reuters see borrowing costs being held at 5.75%.

MSCI's index tracking regional equity indexes

climbed 0.2%, with Brazil's Bovespa

adding 0.7%, helped by industrial-related stocks.

Bourses in Mexico, Chile and Argentina

rose between 0.1% and 6%.

Elsewhere, the yield on Kenyan dollar bonds

slipped over 12 basis points and the shilling weakened

0.7% against the euro. President William Ruto fired his entire

cabinet apart from the foreign minister, bowing to pressure from

nationwide protests that have created the biggest crisis of his

two-year presidency.

Key Latin American stock indexes and currencies:

Latin American market

prices from Reuters

Stock indexes Latest Daily %

change

MSCI Emerging Markets 1126.05 1.33

MSCI LatAm 2306.27 0.2

Brazil Bovespa 128193.37 0.77

Mexico IPC 54419.47 0.26

Chile IPSA 6510.14 0.66

Argentina MerVal 1691666.63 0.098

Colombia COLCAP 1366.48 0.04

Currencies Latest Daily %

change

Brazil real 5.4329 -0.38

Mexico peso 17.8471 -0.18

Chile peso 910.1 0.57

Colombia peso 3966.65 -0.04

Peru sol 3.7683 0.05

Argentina peso 919.5000 -0.05

(interbank)

Argentina peso 1435 1.05

(parallel)