(Updated at 10:32 a.m. ET/ 1432 GMT)

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Brazil's economy expanded 1.4% in Q2 vs 0.9% estimate

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Colombia's peso hits four-week low

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Latam stocks down 0.6%, FX off 0.1%

By Shashwat Chauhan

Sept 3 (Reuters) - Currencies of resources-rich Latin

American countries slid on Tuesday as prices of commodities such

as copper and crude oil came under pressure, with most equity

indexes clocking declines as well.

Brazil's real pared its initial gains to fall 0.1%

against the dollar in volatile trading, tracking declining iron

ore prices.

Data showed the Brazilian economy surprised to the upside in

the second quarter, increasing bets on an imminent interest rate

hike to curb inflationary pressures.

"Based on the outturns for the first half of the year, the

economy looks set to expand by around 3% over this year as a

whole," said William Jackson, chief emerging markets economist

at Capital Economics.

"But this is above Brazil's potential rate and is going to

add fuel to the debate about whether Copom will raise interest

rates."

Mexico's peso slipped 0.1% early on. Investors

awaited the outcome of the debate about a controversial judicial

reform in Mexico's Lower House of Congress scheduled for

Tuesday.

Oil producer Colombia's peso dropped 1.2% to its

lowest in more than four weeks as crude oil prices slumped.

Bloomberg News reported that a deal was imminent to resolve

a dispute that has halted Libyan production and exports, pushing

crude prices to their lowest since around the beginning of the

year.

Currencies of top copper producer Chile's peso and

Peru's sol eased 1% and 0.7%, respectively, as prices of

the red metal touched more than two-week lows.

Meanwhile, the dollar index was muted after data

showed U.S. manufacturing edged up last month from an

eight-month low in July amid some improvement in employment, but

the overall trend continued to point to subdued factory

activity.

The data comes ahead of Friday's all-important August

non-farm payrolls (NFP) report that could offer clues on the

magnitude of an expected rate cut by the Federal Reserve later

this month.

MSCI's index for Latin American currencies

slipped 0.1%, while a gauge for stocks lost

0.6%.

Mexico's benchmark dropped 1.7% and heavyweight

Brazilian shares dipped 0.4%, in tandem with a broad

decline on Wall Street.

Later this week, interest rate decisions in Argentina,

Chile, Poland, Malaysia and Egypt are likely to be on investors'

radar.

Meanwhile in Venezuela, the country's attorney general's

office said a court has issued an arrest warrant for opposition

leader Edmundo Gonzalez, accusing him of conspiracy and other

crimes.

HIGHLIGHTS

** Lebanon ex-central bank chief Riad Salameh arrested over

financial crimes

** Mexico July seasonally adjusted jobless rate 2.7%

** South African economy gains momentum but not as much as

forecast

Key Latin American stock indexes and currencies:

Equities Latest Daily % change

MSCI Emerging Markets 1090.23 -0.56

MSCI LatAm 2222.25 -0.55

Brazil Bovespa 134413.97 -0.36

Mexico IPC 51592.58 -1.72

Chile IPSA 6399.59 -0.88

Argentina Merval 1727405.6 -1.563

2

Colombia COLCAP 1349.2 -0.44

Currencies Latest Daily % change

Brazil real 5.622 -0.08

Mexico peso 19.826 -0.07

Chile peso 926.54 -1.03

Colombia peso 4193.84 -1.21

Peru sol 3.78 -0.71

Argentina peso (interbank) 953 0

Argentina peso (parallel) 1295 0.772200772