EMERGING MARKETS-Brazil stocks hit one-month high on commodities boost

SAO PAULO, July 25 (Reuters) - Brazilian stocks hit a one-month high on Tuesday as a rally in the prices of commodity boosted shares of local blue-chips Vale SA and Petróleo Brasileiro SA. China-listed iron ore futures also snapped a three-day losing streak on the back of China's strong steel sector, lifting shares in Vale, the world's largest iron ore miner. Bradespar SA, a key Vale shareholder, were the biggest gainers on Brazil's benchmark Bovespa stock index. Rising crude futures also lifted shares of Petrobras, as Brazil's state-controlled oil company is known, after major producer Saudi Arabia vowed to reduce exports next month to curb global oversupply. Gains on the benchmark index were limited by shares of Fibria SA after the wood pulp producer posted a surprising quarterly net loss as a weaker currency inflated its debt. Operating profits rose, supported by higher pulp prices and strong global demand, but analysts said that boost is likely to fade in coming quarters. "Although the market is already pricing in lower pulp prices, we believe sentiment will deteriorate further when pulp prices start to correct," UBS Securities analysts wrote in a note to clients. Most Latin American currencies seesawed as traders awaited the U.S. Federal Reserve's policy decision to be announced on Wednesday. Money markets indicated a near-zero chance of an interest rate increase from the U.S. central bank, following a recent batch of weaker-than-expected economic data that fostered bets on a slow path of policy tightening in coming months. That could foster demand for Latin American assets, which typically lure investors with higher yields. Brazil's central bank will announce a rate decision on the same day and traders widely expect it to cut rates by an aggressive 100 basis points.

Key Latin American stock indexes and currencies at 1630 GMT:

Stock indexes Latest Daily YTD pct pct change change MSCI Emerging Markets 1,060.39 -0.36 23.43 MSCI LatAm 2,733.39 -0.1 16.89 Brazil Bovespa 65,532.57 0.67 8.81 Mexico S&P/BVM IPC 51,689.61 0.05 13.25 Chile IPSA 5,015.84 -0.1 20.82 Chile IGPA 25,057.77 -0.08 20.85 Argentina MerVal 21,211.66 -0.46 25.38 Colombia IGBC 10,939.52 0.08 8.01 Venezuela IBC 133,413.77 0.67 320.79 Currencies Latest Daily YTD pct pct change change Brazil real 3.1705 -0.74 2.48 Mexico peso 17.7600 -0.15 16.80 Chile peso 649.11 0.39 3.33 Colombia peso 3,025.63 0.04 -0.80 Peru sol 3.248 -0.06 5.11 Argentina peso (interbank) 17.4100 0.29 -8.82 Argentina peso (parallel) 18.01 0.22 -6.61

(Reporting by Bruno Federowski, editing by G Crosse)