(Updated at 1518 GMT)

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Romania central bank cuts rates by 25 bps, leu steady

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MSCI EM stocks index on track for second day of gains

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Mexico, Peru policy decision due on Thursday

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Latam stocks up 1.5%, FX up 0.9%

By Lisa Pauline Mattackal

Aug 7 (Reuters) - Stocks across Latin America rose on

Wednesday, tracking global shares higher as markets clawed back

losses from a brutal sell-off at the start of the week, while

Mexico's peso jumped ahead of key data and a monetary policy

decision.

Stocks in Brazil, Mexico and Argentina

rose between 0.4% and 0.7%, while MSCI's index of

regional stocks was up 1.5%.

Meanwhile, Mexico's peso soared 2.1%, recovering from

a near two-year low touched on Monday after comments from the

Bank of Japan's deputy governor induced a sharp fall in the yen

.

As a key beneficiary of yen-funded carry trades, where

investors borrowed cheaply in the Japanese currency to invest in

higher-yielding ones, Mexico's currency was one of the worst hit

as yen gains saw many of those trades unwind. Despite the day's

gains, the peso remains around lows last seen in March 2023.

"The good news for Mexico is we expect the U.S. Federal

Reserve to cut rates in September, easing pressure on the

currency, but as a bellwether for emerging market currencies any

bad news in terms of a risk-off environment will hurt it," said

Andres Abadia, chief Latin America economist at Pantheon

Macroeconomics.

Brazil's real also rebounded nearly 1% to a two-week

high against the dollar. An index of Latin American currencies

rose nearly 1%.

Interest rate decisions are due Thursday from both Mexico

and Peru, with Mexican inflation data also due.

Central banks in both countries are seen holding rates, but

it remains to be seen how policymakers will assess the path

forward in light of the recent volatility sparked by worries

about slowing growth in the U.S. and China.

"The market has stabilized a little, so that will probably

allow some central banks to continue with the normalization

process of monetary policy," Abadia said.

Emerging market bourses gained broadly, with Hungary's main

stock index up 1.8% in its best day in over two months.

Romania's leu remained little changed against the

euro after the central bank cut benchmark interest rates

by 25 basis points, as expected by analysts polled by Reuters.

Turkey's lira rose for the first time in three

sessions against the dollar, while Israel's shekel

snapped a seven-day losing streak.

Meanwhile, prices of El Salvador's sovereign bonds rose

after the International Monetary Fund said talks on a

fund-supported program had made progress. The 2034 maturity rose

over 2 cents to 71.44 cents on the dollar, according to LSEG

data.

Markets in Colombia were closed for a public holiday.

HIGHLIGHTS

** GRAPHIC-Colombia's Petro struggles mid-term with slow

economy and stalled reforms

** Johannesburg Stock Exchange's half-year profit slips on

lower equity trading

** Fund managers to lengthen FX hedges on elections,

volatility concerns, survey says

Key Latin American stock indexes and currencies

MSCI Emerging Markets 1051.26 1.98

MSCI LatAm 2167.13 1.52

Brazil Bovespa 126861.02 0.47

Mexico IPC 52632.15 0.44

Chile IPSA 6218.85 0.65

Argentina Merval 1467782.0 0.701

3

Colombia COLCAP 1296.79 0.17

Currencies Latest Daily %

change

Brazil real 5.607 0.98

Mexico peso 19.146 2.14

Chile peso 943.4 0.05

Colombia peso 4135.5 0.07

Peru sol 3.7359 -0.79

Argentina peso (interbank) 936 0

Argentina peso (parallel) 1355 1.4760147

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