*

Brazil's central bank to hold rates steady on July 31,

poll says

*

Mining giant Vale says second-quarter net profit triples

*

Chile's central bank to keep key rate at 5.75%, poll says

*

Stocks up 0.4%, currencies down 0.3%

(Updated at 3:40 p.m. ET/ 1940 GMT)

By Johann M Cherian and Shashwat Chauhan

July 26 (Reuters) -

Most currencies in Latin America were set for weekly losses

on Friday on the back of price drops in commodities such as

copper and iron ore, while global risk markets remained stable

after data showed an improving U.S. inflation picture.

MSCI's index tracking currencies in the resource-rich region

slipped 0.3%, and was poised for a weekly drop

of 1.9%, its steepest decline in more than seven weeks.

Brazil's real dipped 0.3%, but was set to end the

week lower by over 1%, tracking a weekly decline in iron ore

prices.

A Reuters poll showed economists expect the Brazilian

central bank to leave interest rates unchanged for a second time

in a row next week as a wave of currency instability deepens

policymaker concerns over the trajectory of consumer prices.

Mexico's peso held steady at 18.45 per dollar, though

it was headed for a second consecutive weekly decline.

Chile's peso was flat at 949.39 per dollar. The

country's central bank is expected to hold its benchmark

interest rate at 5.75% at its monetary policy meeting next week,

a poll showed.

Bucking the trend, Colombia's peso rose 0.3%, while

Peru's sol also strengthened 0.8%.

Meanwhile, the dollar was subdued after data showed

moderate increases in the personal consumption expenditures

price index in June, underscoring an improving inflation

environment that could position the Federal Reserve to begin

cutting interest rates in September.

"The Fed and the market are still getting what they need

to keep the Fed on a path to a first cut to their policy rate in

September and a 'soft landing' being the most likely economic

outcome," said Greg Wilensky, head of U.S. fixed income at Janus

Henderson Investors, referring to a scenario in which inflation

is tamed without triggering a painful recession or sharp rise in

unemployment.

An easing of U.S. interest rates is generally viewed as

a positive for emerging markets, where interest rates are

broadly higher, increasing the appeal for "carry trades."

On the equities front, Brazil's Bovespa index added

1.3%, with Vale rising 1.7% after the mining giant

said its second-quarter net profit was triple that of the

year-earlier period, beating analyst estimates, as sales jumped.

Usiminas tanked 23.2% after the steelmaker

reported a loss in the second quarter and was operationally

weaker than expected.

A broader index tracking regional bourses

was up 0.4%, though set for its biggest weekly decline of about

3%.

Indexes in Mexico and Colombia fell 0.3%

and 0.4%, respectively.

Attention this weekend will be on presidential elections in

oil-producing Venezuela.

HIGHLIGHTS

**

Venezuela's bondholders

hope pre-election recruitment drive will pay off

**

Chile's Codelco

says output falls 8% in first half of 2024

Key Latin American stock indexes and currencies:

Latest Daily % change

MSCI Emerging Markets 1072.42 -0.15

MSCI LatAm 2196.96 0.41

Brazil Bovespa 127554.78 1.27

Mexico IPC 52772.99 -0.3

Chile IPSA 6452.10 0.17

Argentina MerVal 1536246.06 -0.132

Colombia COLCAP 1348.22 -0.4

Currencies Latest Daily % change

Brazil real 5.6590 -0.21

Mexico peso 18.4544 -0.04

Chile peso 951.5 -0.23

Colombia peso 4025.11 0.32

Peru sol 3.7215 0.61

Argentina peso 928.5000 0.16

(interbank)

Argentina peso 1415 2.12

(parallel)