* US consumer prices rise moderately in July * Mexico, Peru rate decisions due * POLL- Chile to cut interest rate by 100bps in Sept * Brazil services activity grows 0.2% in June * Latam FX up 1.1%, stocks add 1.6% By Ankika Biswas Aug 10 (Reuters) - Most Latin American currencies rose on Thursday, as the dollar dropped on expectations of a halt in U.S. interest rate increases following a benign inflation report, while traders awaited policy decisions from Peru and Mexico. The MSCI Latam currencies index gained 1.1%, with the dollar shedding 0.3% after data showed a moderation in U.S. consumer price growth last month and initial jobless claims gaining in the latest week, reinforcing bets the Federal Reserve will not raise rates at the next policy meeting. Among major events lined up for the day, Mexico's interest rate decision follows latest data revealing the annual inflation rate slowed for the sixth consecutive month in July, a downward trend spurred by a long rate-hike cycle. Most analysts believe that the central bank will hold its benchmark interest rate and start easing gradually towards the year-end. The Mexican peso, one of the top Latam performers so far this year, gained 0.8%. Analysts, however, were divided on the outcome of Peru's policy decision, with Bank of America and Citi analysts expecting a rates hold. Peru's sol was up 0.4%, in line with its Latam peers. Colombia's peso and Chile's peso also gained 1.4% and 0.9%, respectively against a frail dollar. With Chile and Brazil kicking off their policy-easing cycles recently, the interest rate decisions from Mexico and Peru would be closely watched as traders try to gauge whether carry trade could be at risk from rapid rate cuts in Latam. A central bank poll showed Chile is expected to lower its benchmark rate by another 100 basis points at its next policy meeting in September. Brazil's real also gained 1.2%. Data showed the country's services activity grew 4.1% in June year-on-year, slightly below estimates. Meanwhile, Argentina's center-right opposition is locked in a leadership fight between former security tsar Patricia Bullrich and Buenos Aires Mayor Horacio Larreta, with whoever wins in primaries on Sunday the odds-on favorite to be the country's next president. The MSCI index for Latam stocks gained 1.6%, led by Brazilian equities. Brazilian state-controlled lender Banco do Brasil SA gained 1.1% after beating second- quarter profit expectations, but raised its forecasts for bad loans in 2023. Elsewhere, the assassination of Ecuadorean presidential candidate Fernando Villavicencio shocked the South American country, leading some of his rivals to suspend campaigning. Key Latin American stock indexes and currencies at 1432 GMT: Stock indexes Latest Daily % change MSCI Emerging Markets 1011.24 0.28 MSCI LatAm 2476.30 1.55 Brazil Bovespa 119438.15 0.87 Mexico IPC 54423.84 0.37 Chile IPSA 6338.75 -0.04 Argentina MerVal 0.00 0 Colombia COLCAP 1149.50 -1.42 Currencies Latest Daily % change Brazil real 4.8439 1.24 Mexico peso 16.9268 0.75 Chile peso 852.5 0.91 Colombia peso 3960.71 1.43 Peru sol 3.6698 0.35 Argentina peso (interbank) 286.1500 -0.33 Argentina peso (parallel) 601 -0.17 (Reporting by Ankika Biswas in Bengaluru; Editing by Sharon Singleton)
