* Mexican inflation rises more than expected in June * Mexican cenbank seen cutting rates by 100bps -Citi * Prominent creditor group rejects Argentine debt deal * Brazil cenbank studying 'residual' cut in Selic rate (Adds details, updates prices) By Susan Mathew and Ambar Warrick July 9 (Reuters) - Latin American currencies retreated against the dollar on Thursday, while regional stocks fell in tandem with Wall Street as rising COVID-19 infections kept risk appetite fragile. Brazil's real fell about 0.3%. The country's central bank is studying recent data showing inflation is somewhat above expectations to see if there is room for a "residual" cut in interest rates, its president, Roberto Campos Neto, told Reuters in an interview late on Wednesday. Campos Neto said he expected the bank's growth projections to improve as pandemic emergency economic aid measures continued to spur improved growth. Still, borrowing rates in the country are at record lows, making the real less viable as an investment destination. Brazilian stocks fell about 0.5%. The MSCI's index of regional stocks shed nearly 1%, tracking a choppy session on Wall Street as investors weighed improving economic data against a rapid rise in coronavirus cases. The dollar gained on safe-haven flows. Worries remained that surging coronavirus cases may lead to tighter containment measures, which could delay the ongoing economic recovery. The global number of cases breached 12 million on Wednesday, while Brazil surpassed 1.7 million confirmed cases and 67,964 deaths. Latam markets have rebounded sharply from March lows, but surging cases, political issues, concerns over sovereign debt and deteriorating economic fundamentals have weighed. Chilean stocks led losses for the day with a 4.2% drop, while the peso snapped three straight sessions of gains. Mexico's peso was flat as the country's consumer price inflation accelerated more than expected in June but stayed within the central bank's target rate, official data showed. "Given the significant output contraction ... and inflation hovering around the mid-point of the central bank's target, we think Banxico will further cut (interest rates by) 100 basis points to a terminal rate of 4.0%," Citigroup strategists said in a note. They expect a cut of 50 basis points in August, followed by 25-basis-point cuts in September and November. Argentine markets were closed for a local holiday. A prominent group of funds had dismissed the government's "final" debt offer as only a good starting point on Wednesday, but analysts still believe a deal to restructure Argentina's $65 billion sovereign debt can be struck. Key Latin American stock indexes and currencies: Stock indexes Latest Daily % change MSCI Emerging Markets 1079.04 0.83 MSCI LatAm 1957.81 -0.95 Brazil Bovespa 99268.21 -0.5 Mexico IPC 36844.22 -1.71 Chile IPSA 4009.86 -4.21 Colombia COLCAP 1138.65 -1.29 Currencies Latest Daily % change Brazil real 5.3585 -0.25 Mexico peso 22.6275 0.12 Chile peso 788.9 -0.32 Colombia peso 3621.57 0.29 Peru sol 3.4997 0.57 (Reporting by Susan Mathew in Bengaluru; Editing by Marguerita Choy and Leslie Adler)
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