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EMERGING MARKETS-Latam FX slip against strong dollar; cenbank minutes weigh on Brazil's real

 (New throughout, updates prices, market activity and comments)
    By Susan Mathew
    Sept 22 (Reuters) - Latin American currencies fell against a
strong dollar on Tuesday, with Mexico's peso slumping almost 2%,
while a dour economic assessment from Brazil's central bank
weighed on that country's real currency. 
    The real fell more than 1% then bounced to
trade flat. Minutes of the Brazil's previous central bank
meeting showed growing unease over the sustainability of the
economy's rebound, with members saying "unusually strong"
monetary stimulus will be needed to tide over a dent being left
by the coronavirus pandemic.
    "Poor fundamentals still suggest a range-bound to weaker BRL
in the coming quarters, despite better near-term," wrote EM
strategists at Societe Generale in a client note. "Negative real
rates and an accommodative monetary policy stance, along with a
worsening fiscal and debt outlook, are negative for the BRL." 
    Other Latam currencies lost as the greenback gained momentum
after a top U.S. Federal Reserve official said interest rates
may be raised before inflation hits 2%. Raising safe-haven
appeal for the dollar, Chicago Fed President Charles Evans said
further quantitative easing may not provide additional lift to
the U.S. economy. 
    Mexico's peso was down for a third straight session
and set for its sharpest decline in 11 weeks. On Thursday, the
country's central bank is expected to slow the pace of interest
rate cuts due to a rebound in inflation.
    The market remained split over whether Colombia's central
bank board will continue to trim its benchmark interest rate on
Friday to boost the battered economy or halt cuts to stem
capital outflows. The board has cut the rate by a total of 225
basis points over the last six months.
    Colombia's peso fell 1%, headed for its longest
losing streak in three months as the country's workers and
students sought to revive mass demonstrations against the social
and economic policies of President Ivan Duque. 
    Argentina's troubled economy contracted a record 19.1% in
the second quarter from a year earlier, data showed on Tuesday.
The beleaguered currency has been hitting new lows
everyday recently as the pandemic adds to worries about an
economy in recession since 2018.
    While the country just emerged from default on its sovereign
debt, investors again grew concerned about prospects for its
economic recovery and dwindling foreign currency reserves.
    Among shares Mexico's Ipc index snapped a
four-session losing streak, while Brazil's Bovespa
gained 0.4%. Most others in the region lost. 
    
    Key Latin American stock indexes and currencies at 2004 GMT:
  Stock indexes           Latest   Daily %
                                   change
 MSCI Emerging Markets    1082.27    -0.74
                                   
 MSCI LatAm               1885.57    -0.26
                                   
 Brazil Bovespa          97348.14     0.37
                                   
 Mexico IPC              35832.82     0.89
                                   
 Chile IPSA               3634.63    -0.25
                                   
 Argentina MerVal        40647.75   -0.239
                                   
 Colombia COLCAP          1187.73    -0.82
                                   
                                          
      Currencies          Latest   Daily %
                                   change
 Brazil real               5.4730    -0.10
                                   
 Mexico peso              21.7100    -1.68
                                   
 Chile peso                 776.1    -0.35
                                   
 Colombia peso            3819.34    -1.02
                                   
 Peru sol                   3.549     0.00
                                   
 Argentina peso           75.6400    -0.07
 (interbank)                       
                                   
 
 (Reporting by Medha Singh in Bengaluru; Editing by Andrea Ricci
and David Gregorio)
  
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