* Mexico June industrial production rises 0.6% vs May * Peru holds interest rate at 7.75% * Brazil consumer prices up more than expected in July (Updated at 1900 GMT) By Ankika Biswas and Amruta Khandekar Aug 11 (Reuters) - Most major Latin American currencies fell on Friday as the dollar gained on hotter-than-expected producer prices data, while Mexico's peso rose after the country's central bank indicated it could hold interest rates steady for a while. The MSCI Latam currencies index fell 0.8%, putting it on track for second weekly decline, with the dollar headed for a fourth weekly gain. U.S. producer prices increased slightly more than expected in July. While bets on a U.S. rate-hike pause were largely intact after the data, market participants grew concerned that U.S. interest rates could stay elevated for longer. Mexico's peso advanced 0.7%, a day after the central bank maintained its benchmark interest rate on Thursday and underscored that the inflationary outlook remains "very complex", suggesting rate likely staying on hold for longer. "In the case of Mexico, there are several issues that would explain why rate cuts are probably expected more towards the end of the year," said Axel Christensen, chief investment strategist for Latin America at BlackRock. "The Bank of Mexico doesn't seem to be in a hurry (to ease policy) and the economy has been showing fairly higher-than-expected activity." Adding to the case, data showed Mexican industrial output rose 0.6% in June from May and was 3.7% higher year-on-year, beating expectations. Meanwhile, weak copper prices pushed Chile's peso and Peru's sol, down around 1.1% and 0.3% respectively. Peru's central bank on Thursday kept its benchmark rate unchanged at 7.75% for the seventh consecutive month in an attempt to bring inflation closer to its target rate. Additionally, Peru's economy likely shrunk between 0.5% and 0.7% in June, the central bank's top economist said. The Brazilian real slipped 0.2% against the dollar. Data showed Brazil's consumer prices rose more than expected in July, with the central bank governor noting core services inflation still running well above official target. Traders will monitor Argentina's primary election on Sunday, with a Reuters poll showing monthly inflation rate likely sped back up to 7.1% in July, a blow to the ruling Peronist coalition battling to avoid defeat. The MSCI Latam stocks index was also set for a second weekly fall, with Mexican equities down 1.1%, dragging it lower on Friday. Elsewhere, Nigeria's overseas bonds fell after the country's central bank reported a $7.5 billion loan from U.S. banks JP Morgan and Goldman Sachs in financial statements published for the first time since 2015. Key Latin American stock indexes and currencies at 1900 GMT: Stock indexes Latest Daily % change MSCI Emerging Markets 996.05 -1.22 MSCI LatAm 2414.96 -1.64 Brazil Bovespa 117604.27 -0.63 Mexico IPC 53281.56 -1.13 Chile IPSA 6281.75 -0.13 Argentina MerVal 473719.66 0.71 Colombia COLCAP 1147.97 -0.42 Currencies Latest Daily % change Brazil real 4.9018 -0.41 Mexico peso 17.0070 0.72 Chile peso 856.5 -1.30 Colombia peso 3960.75 0.02 Peru sol 3.6797 -0.26 Argentina peso 287.3000 -0.38 (interbank) Argentina peso 595 1.18 (parallel) (Reporting by Ankika Biswas, Amruta Khandekar and Shristi Achar A in Bengaluru; Editing by Alexander Smith and Hugh Lawson)
