* Colombia CPI due Monday * Brazil likely saw deflation in June * Brazil economists lower inflation forecast for 8th week * Chile expected to cut rates by 75bps- poll By Ankika Biswas July 10 (Reuters) - A gauge for Latin American currencies dipped on Monday amid piling evidence of a pitted economic recovery in top metals consumer China, with focus on key inflation readings through the week. China's producer prices fell at the fastest pace in over seven years in June, while consumer prices teetered on the edge of deflation, pressuring policymakers to unveil more stimulus. The MSCI index for Latam currencies was off 0.1% after ending two straight weeks lower. Brazil's real slipped 0.5% following a near-1% advance on Friday after the lower house approved reforms to the country's complex consumption taxes. All eyes will be on Brazil's monthly consumer price data on Tuesday, with a Reuters poll showing the country likely registered mild deflation in June, bolstering the case for a potential start to monetary easing. Private economists have lowered their expectation for 2023 inflation for the eighth week in a row, a central bank poll showed. Traders will also monitor Colombia's inflation data later in the day, as well as Mexico's industrial output and Argentina's inflation data later in the week. Meanwhile, a drop in copper prices pressured the world's top producers of the red metal, Chile's peso and Peru's sol . A poll of traders showed Chile's central bank is expected to kick-off a monetary easing cycle later this month with a 75-basis-point rate cut owing to slowing inflation. Peru's interest rate decision is due on Thursday. Expectations for galloping consumer prices in Argentina remain solidly in triple-digit territory, a monthly analyst poll showed on Friday, though the forecast edged down slightly compared with last month's survey. Colombia's peso and the Mexican peso rose 0.5% and 0.3%, respectively, even though oil prices were down. Both the countries are top oil exporters. The MSCI gauge for Latam stocks fell 0.3%, with Brazil's Bovespa and Colombia's Colcap leading declines. BofA analysts noted weak foreign inflows into Brazil's local exchange during its rally since April and continued outflows from local equity funds since September 21. Mercado Libre's Brazil-listed shares dropped 7% on report of a BofA downgrade to "neutral" from "buy" on the e-commerce firm's U.S.-listing. Key Latin American stock indexes and currencies at 1400 GMT: Stock indexes Latest Daily % change MSCI Emerging Markets 982.30 0.17 MSCI LatAm 2438.16 -0.26 Brazil Bovespa 118487.85 -0.34 Mexico IPC 53756.91 -0.27 Chile IPSA 5955.53 0.22 Argentina MerVal 0.00 0 Colombia COLCAP 1129.81 -0.29 Currencies Latest Daily % change Brazil real 4.8877 -0.48 Mexico peso 17.0590 0.45 Chile peso 810 -0.35 Colombia peso 4141.61 0.25 Peru sol 3.6404 -0.29 Argentina peso (interbank) 262.5000 -0.57 Argentina peso (parallel) 489 0.61 (Reporting by Ankika Biswas in Bengaluru; Editing by Christina Fincher)
