(Adds details from Mexico, final data) SAO PAULO, June 26 (Reuters) - Brazil and Mexico's currencies strengthened on Monday after weaker-than-expected U.S. manufacturing data bolstered bets that the U.S. Federal Reserve will increase interest rates by less than planned in coming months. New orders for key U.S.-made capital goods unexpectedly fell in May and shipments declined, suggesting a loss of momentum in manufacturing halfway through the second quarter. The reports added to a recent batch of mixed economic figures that have left investors skeptical about the Fed's stated plan of raising U.S. rates once more before the end of 2017 and another three times next year. A slower pace of hikes could support demand for high-yielding emerging market assets. Traders will look for further clues on the U.S. central bank's outlook on Tuesday, when Fed Chair Janet Yellen is due to deliver a widely anticipated speech in Europe. The Brazilian real strengthened 1.13 percent against the dollar, and the Mexican peso touched its strongest level since May 2016, closing up more than 0.8 percent. Argentina's peso, meanwhile, closed at a new low of 16.30 per dollar due to a general realignment of portolios for hedging purposes before the end of the month. Colombian markets were closed for a local holiday. Brazil's benchmark Bovespa stock index rose 1.8 percent, the biggest gainer among markets in the region, while Mexico's bourse climbed by 0.38 percent. Shares of Brazilian steelmakers, such as Cia Siderúrgica Nacional SA and Usinas Siderúrgicas de Minas Gerais SA, led the upswing, tracking rising prices of steel and iron ore. Alpargatas SA, which is not part of the benchmark index, rose 3.87 percent after its controlling shareholder J&F Investimentos SA signed a nondisclosure agreement with Cambuhy Investimentos Ltda to potentially sell all of its shares.
Alpargatas is among the J&F assets put up for sale as the holding company seeks funds to pay for a 10.3 billion real ($3.11 billion) fine with Brazilian prosecutors. J&F's fine, the world's biggest to date, was imposed after members of the Batista family admitted to bribing scores of politicians.
Key Latin American stock indexes and currencies at 2150 GMT:
Stock indexes Latest Daily YTD pct pct
MSCI Emerging Markets 1,019.11 0.74 18.19 MSCI LatAm 2,531.28 1.53 8.14 Brazil Bovespa 62,188.09 1.8 3.26 Mexico S&P/BVM IPC 49,165.67 0.38 7.72 Chile IPSA 4,766.20 0.19 14.81 Chile IGPA 23,878.79 0.17 15.17 Venezuela IBC 122,200.52 1.36 285.43 Currencies Latest Daily YTD pct pct
Brazil real 3.3015 1.13 -1.58 Mexico peso 17.8655 0.81 16.11 Peru sol 3.253 0.09 4.95 Argentina peso (interbank) 16.30 -0.86 -2.61 Argentina peso (parallel) 16.62 0.66 1.20
($1 = 3.3137 reais)
(Reporting by Bruno Federowski; Editing by Jeffrey Benkoe and Jonathan Oatis)