EMERGING MARKETS-Latam currencies dip as dollar rebounds, equities steady ahead of Nvidia results

By Pranav Kashyap

Aug 27 (Reuters) - Most Latin American currencies dipped on Wednesday as the dollar staged a comeback, while equities were largely steady as caution prevailed ahead of Nvidia's results.

MSCI's index for Latin American currencies .MILA00000CUS declined 0.5%.

The dollar =USD clawed back some losses, appearing to brush off immediate fears over the Federal Reserve's independence followed U.S. President Donald Trump's attempt on Monday to fire Fed Governor Lisa Cook.

The Mexican peso MXN= shed 0.5%, just off a one-week low, while its benchmark stock index .MXX was largely flat. Data showed the country posted a $296 million trade surplus in July.

With only July's jobless data on deck in Mexico, the peso's moves this week have been largely driven by macro trends.

Recent indicators continue to paint a picture of a sluggish economy, underscoring expectations for further rate cuts.

Minutes from Banxico's latest policy meeting revealed that board members were open to easing rates further to support growth.

"We believe that Banxico has more room to continue its own easing cycle, keeping reasonable interest rate differentials with the US and without putting undue pressure on the peso," Morgan Stanley analysts said.

Meanwhile, the burden of Brazil's high borrowing costs continued to creep up. Fresh data showed loan defaults rose to their highest in nearly eight years in July, underscoring the strain of interest rates at 15%. Borrowing costs were at almost a two-decade high, and second only to Argentina in the region.

Meanwhile, the data also showed credit growth is sputtering, adding to signs of economic fatigue.

Brazil's real BRL= slipped 0.2%, while the country's equities .BVSP were flat. Investors awaited speeches by the country's finance minister and the president of the central bank and the release of economic data.

MSCI's index for the regions' equities .MILA00000PUS lost 0.5%. Most equities in the region were largely flat, following Wall Street, with the focus on Nvidia's earnings after the U.S. close.

The AI titan has become the heartbeat of the global tech rally, and data showed options traders are pricing in a $260 billion swing in its market value.

"The stock market has been all but assured of a September rate cut, the next hurdle for markets to climb is Nvidia's earnings," said Clark Bellin, president and chief investment officer, Bellwether Wealth.

"Investors look to this company every quarter for reassurance that the AI story is still intact."

Meanwhile, the Argentine peso ARS=RASL attempted to recover lost ground, up 0.1% after falling nearly 3% on Monday. Corruption allegations shook the country's political landscape and financial markets.

Stocks in Buenos Aries .MERV dropped 1.5%.

The Chilean peso CLP= slipped 0.19%, while equities in Bogota .SPISA were up 0.3%.

Key Latin American stock indexes and currencies: