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EMERGING MARKETS-Mexican peso pares gains after rate hike

       * Bank of Mexico hikes rate 75 bps to record high 8.5%
    * Argentina cenbank hikes rate by 950 basis points
    * Brazil services sector up for 2nd straight month
    * Colombia's Q2 economic growth forecast at 11.25% y/y

 (Updates prices; adds details, comment)
    By Susan Mathew and Anisha Sircar
    Aug 11 (Reuters) - Mexico's peso pared gains on Thursday
after the central bank announced an interest rate hike that met
expectations, while other Latin American currencies and emerging
market shares  firmed on optimism for milder U.S. inflation.
    The Bank of Mexico hiked the benchmark interest rate by 75
basis points to a record 8.5%, in line with estimates in a
Reuters poll, and mirroring the U.S. Federal Reserve's most
recent decision.
    "Banxico's board members (especially those seen as usually
dovish) sent a clear message by unanimously hiking. ... This
underscores that the bank will maintain its hawkish tone in
upcoming decisions," said Wilson Ferrarezi, economist at TS
Lombard.
    "However, it also left the door open for another 75 bps or
50 bps hike in September, underscoring it'll remain in
data-dependent mode. This will largely depend on the August CPI
(Consumer Price Index) figures and the Fed's decision in
September."
    Mexico's peso pared losses slightly, rising 0.3% and
staying close to six-week highs hit last session.
    Argentina's tightly controlled peso fell 0.2%. The
country's central bank raised the benchmark 'Leliq' rate 950
basis points to 69.50%.
    Peru's central bank is also seen hiking its rates for the
13th consecutive time, to 6.5%. Peru's annual inflation rate
stood at 8.74% on a year-on-year basis in July, edging lower
from its highest in a quarter of a century.
    Several emerging market central banks have tightened
monetary policy in the face of surging prices as economies
recover from the COVID-19 pandemic and Russia-Ukraine war.
    Some relief came on Wednesday when data showed U.S.
inflation remained unchanged in July, prompting markets to scale
back expectations of a third 75 bps hike in September.

    Brazil's real, which has outperformed this year due
to the country's aggressive tightening cycle, fell 1.4%.
    The real faces volatility as October presidential elections
approach. In his re-election bid, President Jair Bolsonaro said
he plans to simplify the tax regime, lower corporate taxes and
reduce import tariffs to foster trade.
    State-run oil company Petrobras said it would
lower refinery gate diesel prices by 4% starting Friday, the
second cut in a week, which drew praise from Bolsonaro.
Petrobras shares fell 1%.
    Colombia is expected to grow 11.25% in the second quarter
versus a year ago, according to a Reuters poll.

    Key Latin American stock indexes and currencies at 1923 GMT:


    Stock indexes             Latest      Daily % change
 MSCI Emerging Markets          1013.20                1.6

 MSCI LatAm                     2241.82               -1.3

 Brazil Bovespa               109898.19              -0.31

 Mexico IPC                    48158.25               0.73

 Chile IPSA                     5304.87               0.61

 Argentina MerVal             123633.03              1.231

 Colombia COLCAP                1321.89               0.59


       Currencies             Latest      Daily % change
 Brazil real                     5.1605              -1.48

 Mexico peso                    19.9665               0.25

 Chile peso                       883.9               0.36

 Colombia peso                  4225.13               1.02
 Peru sol                        3.8627               0.41

 Argentina peso                134.2500              -0.18
 (interbank)

 Argentina peso                     292               1.03
 (parallel)


 (Reporting by Susan Mathew and Anisha Sircar in Bengaluru;
Editing by Susan Fenton and Richard Chang)

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