EMERGING MARKETS-Dollar stumbles after Trump's Fed attack; Brazil's real soars

By Ragini Mathur, Purvi Agarwal, Pranav Kashyap

June 26 (Reuters) - Latin American currencies rose on Thursday, led by Brazil's real, as the U.S. dollar stumbled in the wake of President Donald Trump's latest remarks targeting the Federal Reserve chair.

Brazil's real BRL= vaulted 1.1%, eying its strongest session in over a month as the central bank doubled down on what it called its absolute commitment to a 3% inflation target - even as it signaled a pause on rate hikes.

Fresh data revealed inflation cooled more than anticipated in early June, yet remained stubbornly above target.

Adding to the real's momentum, Brazil's central government reported a narrower-than-expected primary deficit for May, buoyed by robust revenue and lower spending.

Investors, once wary of Brazil's fiscal discipline, have watched rates climb to a near 20-year peak of 15% following a series of hikes.

Now, BofA Global Research predicts Brazil could start cutting rates as soon as December, ahead of market consensus for a January move, citing limited fallout from U.S. trade policies.

Brazilian stocks .BVSP climbed 1%.

Meanwhile, according to a Wall Street Journal report, Trump had toyed with the idea of announcing Fed Chair Jerome Powell's replacement by September or October.

"This has led to speculation U.S. interest-rate cuts may come sooner and go further than currently priced in to markets, and the dollar has taken a dip," said Fawad Razaqzada, market analyst at City Index.

Meanwhile, the dollar index =USD skidded to multiyear lows, pressured by doubts over the Federal Reserve's independence and speculation of a dovish policy shift.

Across Latin America, Mexico's peso MXN= edged 0.3% higher while the country's stock index .MXX touched a near two-week high ahead of a central bank decision widely expected to deliver a half-point rate cut.

Argentina's peso also gained 0.6% as investors awaited a rate decision, while Peru's stock market .SPBLPGPT flirted with record highs, last up 1.7%, while the sol PEN= advanced 0.6%.

Chile's peso CLP= gained 0.4%, tracking copper prices that were around three-month highs. MET/L

MSCI's index for Latin American currencies .MILA00000CUS was up 0.6%, while the stocks gauge .MILA00000PUS added 1.5%.

Global sentiment got a boost after Israel and Iran agreed to a ceasefire, halting a 12-day conflict that had rattled markets.

Still, caution lingers, as Iran’s supreme leader warned of retaliation against any future U.S. attacks on the region.

Stocks in Israel .TA125 closed 0.7% lower, and shares in Turkey .XU100 were down 0.8%.

Israel's shekel ILS= edged up 0.3%, while Turkey's lira TRYTOM=D3 slipped 0.1%.

Key Latin American stock indexes and currencies around 1435 GMT: