EMERGING MARKETS-LatAm currencies slip as traders weigh U.S. and regional prints

By Pranav Kashyap and Twesha Dikshit

Sept 4 (Reuters) - Most Latin American currencies eased on Thursday, with the Mexican peso leading losses, as traders chewed over economic releases from the region and the U.S.

The Mexican peso MXN=, fell 0.5%, set for its worst day in over three weeks if losses hold, while Mexican equities .MXX were trading 0.2% lower. Business investment in Mexico fell 1.4% in June, data showed.

Argentina's peso headed for a third straight week of declines ahead of local elections in Buenos Aires on September 7 and midterm polls in October.

The peso ARS=RASL was steady on the day while Argentine stocks .MERV inched up 0.1%.

The Treasury said it would support liquidity with interventions in a bid to stabilize the currency, which suffered a sharp selloff last week after corruption allegations involving President Javier Milei.

Analysts said that currency intervention in markets pointed to government fears of the midterm election outcome for Milei's party.

Meanwhile, Brazilian equities .BVSP were poised to snap a three-day losing streak, up 0.3%. The real BRL= flatlined on the day, but was headed for its third consecutive week of losses, its longest weekly losing streak in nearly five months.

A study showed that Brazil had emerged as the third-largest destination for Chinese investments, with projects across several sectors attracting $4.2 billion last year.

MSCI's gauge of Latin American currencies .MILA00000CUS was down 0.3%, while a similar gauge of stocks .MILA00000PUS lost 0.4%.

Softer U.S. private payrolls and higher jobless claims kept investors on edge and EM currencies choppy. With a relatively light week in the region, attention was fixed on Friday's U.S. non-farm payrolls.

Ongoing U.S. labor strain and a weakening dollar are channeling flows into high‑yielding assets, analysts said.

The carry trade in Brazil's real could remain compelling even if the Brazilian central bank kicks off an easing cycle, with interest rates parked at a near-20-year high.

Most Latin American benchmarks have also outperformed Wall Street's S&P 500 index in 2025.

"If we see some downside surprise in U.S. data, we could see the Federal Reserve dial up easing more than is currently priced in and that's a downside risk for the dollar," said Elias Haddad, senior markets strategist at Brown Brothers Harriman.

"Looking at the performance in equity markets and bond markets, it does show some rotation away from U.S. assets."

The Colombian peso COP= was just off an over-one-month high touched in the previous session, while stocks in Bogota .COLCAP were flat ahead of Friday's Colombian inflation data.

In Central Europe, Hungary's forint EURHUF= firmed to hover near one-year highs against the euro while the benchmark index .BUX added 1.1%. The currency has outperformed other central European currencies as the central bank has been keeping its base rate at 6.5% owing to inflation pressures.

Polish stocks .WIG20 gained 1.3%, a day after the central bank cut interest rates by 25 bps.

Key Latin American stock indexes and currencies: