EMERGING MARKETS-Latam FX slips as dollar firms; Mexico's judicial elections and Nvidia results awaited

By Pranav Kashyap

May 28 (Reuters) - A strengthening U.S. dollar cast a shadow over most Latin American currencies on Wednesday, while global investor attention pivoted towards the impending results from AI titan Nvidia.

MSCI's broad gauge for the region's currencies .MILA00000CUS fell 0.6% as the greenback =USD ticked up 0.2%.

Its counterpart for equities .MILA00000PUS eased 0.54%, retreating from a more than eight-month peak hit the previous session.

In Brazil, the benchmark stock index .BVSP lost 0.3%, weighed down by a sharp drop in the nation's airline Azul AZUL4.SA.

The carrier's shares tumbled as much as 11% after it initiated Chapter 11 bankruptcy protection proceedings in the U.S. earlier in the day.

Brazil's equity gains the day before were largely powered by data showing the country's inflation rate decelerated for the third consecutive reading, a welcome sign the central bank's sustained efforts — keeping interest rates at their highest in nearly two decades — are beginning to yield results.

The real BRL= lost nearly 1%.

Fresh GDP figures for the first quarter, due for release on Friday, may shed more light on Brazil's economic landscape.

Meanwhile, Mexico is on the cusp of its first-ever judicial elections this Sunday. Voters will cast ballots for federal judges and magistrate roles, a roster that includes all Supreme Court justice positions.

The Mexican peso MXN= still bears the scars of a market exodus triggered when President Claudia Sheinbaum, a key proponent of the judicial overhaul, secured her presidential victory in June 2024.

That same month was the most brutal for the peso since the COVID-19 pandemic in 2020, and ratings agency Moody's warned that the reforms could carry significant implications for the country's sovereign rating in September.

While Mexican stocks .MXX managed to claw back all their losses from back in June last year, the embattled peso has yet to stage a similar recovery.

"While the judicial elections stand out for their complexity and unprecedented scope, markets seem relaxed about their implications," said analysts at UBS said.

"This is a far cry from the volatility seen post the June 2024 elections."

On the day, Mexican equities advanced 0.49% and were just off the record high hit in the previous session.

Meanwhile, the peso slipped 0.3%, while the dollar found fresh impetus overnight after robust U.S. consumer confidence data.

Investor attention has pivoted to the quarterly results from AI bellwether Nvidia NVDA.O due after the U.S. market close, a release that may have broader market implications.

Elsewhere, El Salvador's international dollar bonds were little changed. The International Monetary Fund reached an agreement with the nation to disburse approximately $120 million, following the successful first review of an ongoing $1.4 billion, 40-month program.