EMERGING MARKETS-LatAm FX edge up as markets parse US data; Argentina's weekend vote looms

By Pranav Kashyap

Sept 3 (Reuters) - Most Latin American currencies rose marginally on Wednesday as markets parsed fresh U.S. data, with Argentina counting down to weekend elections.

The MSCI index for Latin American currencies .MILA00000CUS rose 0.32%, while a similar gauge for stocks .MILA00000PUS gained 0.57%. Both gauges advanced for the first time in three sessions.

Argentina's peso ticked up 0.5% as elections near, largely keeping assets on the back foot after last week's selloff tied to allegations involving President Javier Milei. Local polls are scheduled for September 7, with midterms in October.

The Treasury said on Tuesday it will move to support liquidity with interventions, aiming to stabilize the currency.

Milei's reform drive and fiscal discipline had earlier lifted sentiment on growth since he came to power in 2023.

Brazil's real BRL= clawed back from a two-week low, gaining for the first time in three sessions, while Sao Paulo .BVSP stocks gained 0.11%.

The country's interest rates, parked near a 20-year high, continued to dent growth. Fresh data showed July marked a fourth straight month of flat industrial output.

Analysts see broader Latin American easing picking up once the Federal Reserve turns to cuts.

"Anytime the Fed is contemplating cutting rates, investors tend to look outside the U.S. for prospectively better opportunities in the money markets," said Thierry Wizman, global forex and rates strategist at Macquarie.

"There are higher interest rates in some of the emerging markets, such as Brazil and Mexico in Latin America. These are places that I would expect the speculative flow of money to move in."

A weaker U.S. JOLTS report of 7.18 million job openings versus 7.37 million expected set the tone as markets await private payrolls data on Thursday and nonpayrolls data on Friday for clearer readthroughs on the Fed's next move.

Chilean stocks .SPISA rose 0.77%, while the country's peso CLP= was up 0.53% ahead of inflation data due on Friday.

The Mexican peso MXN= ticked up 0.2%, while the country's stocks .MXX rose 0.5%. Data showed the consumer confidence index was 46.7 in August.

In Central and Eastern Europe, Poland's central bank lowered interest rates by 25 basis points in a widely expected move. The benchmark WIG20 .WIG20 index gained 0.5% while the zloty EURPLN= was marginally higher.

Following Turkey's inflation reading, JPMorgan said Turkey's central bank was likely to scale back planned interest rate cuts, beginning with only 200 basis points next week.

Turkish stocks .XU100 fell 1.1% and were on course for a two-day drop of nearly 5%, as political risk flared with the ouster of the CHP's Istanbul head.

The yield of the country's two-year note TR2YT=RR touched a one-month high.

Key Latin American stock indexes and currencies: