EMERGING MARKETS-Latam FX steady, stocks shrug off US tariffs; Mexican peso down before rate decision

By Sukriti Gupta and Purvi Agarwal

Aug 7 (Reuters) - Most Latin American currencies were flat to slightly lower on Thursday, while stocks rallied as higher hopes of interest rate cuts by the Federal Reserve buoyed sentiment and investors looked past U.S. tariffs.

Expectations were rife that the U.S. Federal Reserve could begin a policy easing cycle, spurred by a bleak jobs report and the resignation of a Fed governor last week, with a September rate cut all but priced in.

Equities in EMs tracked tech-driven gains on Wall Street earlier in the day, after U.S. President Donald Trump exempted chip firms manufacturing in the U.S., or ones that committed to do so, from his sweeping tariffs.

"In order to try to be more protectionist of technology and semiconductors, it means that there's going to be a lot more friend-shoring and near-shoring, so down the line that might actually help improve things for Latam," said Juan Perez, head of trading at Monex USA.

The optimism spilled over with heavyweight Brazilian equities .BVSP gaining 0.9%. Utility giant Eletrobras ELET6.SA jumped 6.4% after its second-quarter results.

Mexican .MXX stocks rose 0.6%, while shares in Chile .SPIPSA were up 1%, helped by higher copper prices.

MSCI's index tracking Latam stocks .MILA00000PUS edged up 1.1%, on course for a fourth session of gains.

Tariffs, however, remained on the radar after Trump imposed an additional 25% tariffs on Indian imports on Wednesday, over its purchase of Russian oil. It now faces 50% tariffs.

The country, with Brazil and South Africa are members of the BRICS group, that face some of the highest tariff rates.

"The tariffs are very idiosyncratic and are going to be used in a very political kind of way like we're seeing in case of Brazil and India," said Perez.

The dollar index =USD gained slightly after a report said Fed Governor Christopher Waller emerged a favorite for the next Fed Chair. MSCI's Latam currency gauge .MILA00000CUS was flat.

Most regional currencies were subdued, with the only significant moves in the Brazilian real BRL=, down 0.1%, and the Mexican peso MXN=, down 0.4%.

Data showed Mexican consumer prices rose 3.51% in the year through July. The regional central bank is widely expected to deliver a 25 basis point interest rate cut later in the day.

Elsewhere, the Kremlin said President Vladimir Putin and Trump will meet in the coming days, as Trump seeks a breakthrough to end the Ukraine war.

Russia's rouble RUB= strengthened 1%, over-the-counter market data showed, while Moscow stocks jumped. Ukrainian dollar bonds rallied, broadly up near 3 cents on the dollar each, following the announcement.

The Czech crown EURCZK= appreciated 0.3% against the euro after the central bank held rates steady and said that inflation pressures did not allow for further easing at the moment.

Markets in Colombia were closed for a public holiday.

Key Latin American stock indexes and currencies: