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EMERGING MARKETS-Brazil, Mexico currencies up after weak U.S. manufacturing data

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SAO PAULO, June 26 (Reuters) - Brazilian and Mexican 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 the manufacturing sector 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 scheduled to deliver a widely anticipated speech in Europe. The Brazilian real strengthened 0.9 percent, while the Mexican peso touched its strongest level since May 2016. Colombian markets were closed for a local holiday. Brazil's benchmark Bovespa stock index rose 1.3 percent, the biggest gainer among markets in the region. Shares of 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 4.3 percent to a nearly two-month high 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 1415 GMT:

Stock indexes daily % YTD %

change change Latest

MSCI Emerging Markets 1020.37 0.86 17.33 MSCI LatAm 2524.56 1.26 6.52 Brazil Bovespa 61839.67 1.23 2.68 Mexico S&P/BVM IPC 49079.27 0.2 7.53 Chile IPSA 4766.20 0.19 14.81 Chile IGPA 23878.79 0.17 15.17 Venezuela IBC 121115.79 0.46 282.01 Currencies daily % YTD %

change change Latest

Brazil real 3.3101 0.86 -1.84 Mexico peso 17.8575 0.85 16.16 Peru sol 3.252 0.09 4.98 Argentina peso (interbank) 16.1800 0.00 -1.89 Argentina peso (parallel) 16.51 0.12 1.88

($1 = 3.3137 reais)

(Reporting by Bruno Federowski; Editing by Jeffrey Benkoe)