(Updated at 1502 GMT)

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Mexico's peso to weaken further in medium term, poll shows

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Rio paves way for new financial exchange to rival B3

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Polish central bank leaves rates unchanged

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Latin American stocks up 2.6%, currencies rise 1.2%

By Johann M Cherian

July 3 (Reuters) - Currencies and equities across most

resource-rich Latin American countries rebounded from recent

losses on Wednesday, as base metal prices ticked higher, but

concerns around underlying macroeconomic issues lingered.

The MSCI index that tracks currencies in the region

added more than 1.2%, rebounding from a six-day

losing streak.

The dollar also weakened to a two-week low as the latest

economic data fanned hopes of interest rate cuts later this

year. The Fed is due later on Wednesday to release the minutes

from its last policy meeting.

Financial markets are squarely focused on the release on

Friday of the monthly U.S. employment report for June, which

could offer clues on the outlook for the Fed's policy path.

"It's definitely some stabilization pretty much across the

board. We're in this low volatility window and Friday's (U.S.)

payrolls is going to be pretty important," said Padhraic Garvey,

regional head of research for the Americas at ING Financial

Markets.

Brazil's real jumped 1.8% after logging losses in

five of the last six sessions, as prices of iron ore, a top

export for the country, hit a four-week high, while investors

assessed better-than-expected industrial production data for

May.

Still, the currency hovered near two-year lows amid concerns

about the country's fiscal stability. Brazil's finance minister

said the government aims to present and approve a bill to

renegotiate state debts with the federal government soon.

"If you ask me, what's the biggest issue in Brazil? It's got

to be the fiscal deficit, which remains elevated, and that

efforts to bring it down are being frustrated," Garvey added.

The currencies of Chile and Peru, the world's

two largest copper producers, rose more than 1% each as prices

of the red metal jumped.

Mexico's peso strengthened 0.7%. The currency on

Friday logged its biggest quarterly drop since the COVID-19

pandemic and a poll showed it could remain weak in the medium

term given political uncertainty at home and abroad.

On the equities front, MSCI's index tracking regional

bourses rallied 2.7% to clinch a one-week high,

with Brazil's Bovespa index adding 1.3%, underpinned by

miner Vale's 2.7% jump.

The city of Rio de Janeiro signed into law a bill that

lowers taxes for the opening of a new financial exchange to

compete with Sao Paulo's B3. Shares of the exchange

operator were last up 0.8%.

Chile's main index added 1.9%, with LATAM Airlines

adding 1.3% after the carrier said it intends to

proceed with the process of re-listing American Depositary

Receipts (ADRs) in tandem with the first secondary sale.

The main stock indexes in Peru and Mexico

also rose more than 1.3% each.

Elsewhere, Poland's zloty climbed 0.3% against the

euro after the country's central bank left its main interest

rate on hold at 5.75%, as expected.

The yield on Egypt's dollar-denominated sovereign bonds

slipped more than 31 basis points following a

cabinet reshuffle that included new finance and foreign

ministers.

Key Latin American stock indexes and currencies:

Latin American market

prices from Reuters

Stock indexes Latest Daily %

change

MSCI Emerging Markets 1094.08 1.32

MSCI LatAm 2213.99 2.53

Brazil Bovespa 126435.64 1.32

Mexico IPC 52917.31 1.87

Chile IPSA 6500.14 1.8

Argentina MerVal 1640767.61 0.413

Colombia COLCAP 1385.94 0.17

Currencies Latest Daily %

change

Brazil real 5.5861 1.42

Mexico peso 18.1530 0.52

Chile peso 937 1.20

Colombia peso 4094.91 0.66

Peru sol 3.786 0.59

Argentina peso 915.0000 -0.05

(interbank)

Argentina peso 1405 1.78

(parallel)