SAO PAULO, Sept 13 (Reuters) - Latin American currencies weakened on Wednesday after U.S. producer prices rebounded in August, sparking bets on accelerating inflation that could drive the Federal Reserve to raise U.S. interest rates again this year. A surge in the cost of gasoline drove U.S. producer prices 0.2 percent higher in August after slipping 0.1 percent in July, and there were also signs of a pickup in underlying producer inflation. The increase fueled expectations that consumer inflation data due on Thursday could surpass analysts' expectations, bringing some comfort to the U.S. central bank that the pace of price hikes may be advancing toward its target of 2 percent. Inflation has lagged expectations for months despite signs of labor market tightening, puzzling Fed policymakers and casting doubts over its stated plan of hiking rates for a third time this year. Should it follow through with those plans, that could hamper investor demand for high-yielding emerging market currencies. The Mexican peso and the Brazilian real slipped 0.3 percent. Chile's peso led the region's losses, dropping nearly 1 percent as it tracked a decline in copper prices. Brazil's benchmark Bovespa stock index rose 0.2 percent, but stayed off all-time highs reached on Tuesday. Traders were somewhat cautious after Brazil's top court approved a new graft probe against President Michel Temer for suspected corruption involving a decree regulating the country's ports. The investigation could delay his efforts to implement market-friendly reforms, which are seen by investors as critical to boosting long-term growth in Latin America's largest economy. Shares in JBS SA jumped 2.1 percent in volatile trading after police detained its chief executive officer, saying he used insider information to avoid hefty losses related to a plea bargain signed earlier this year. Traders said the move could accelerate a change in command that may help the world's largest meatpacker lick the wounds from a massive corruption scandal.
Key Latin American stock indexes and currencies at 1720 GMT:
Stock indexes Latest Daily YTD pct pct change
MSCI Emerging Markets 1,098.21 -0.37 27.83 MSCI LatAm 2,953.38 -0.68 27.04 Brazil Bovespa 74,663.83 0.17 23.97 Mexico S&P/BVM IPC 50,237.61 -0.48 10.07 Chile IPSA 5,176.19 0.14 24.69 Chile IGPA 25,861.22 0.11 24.73 Argentina MerVal 23,668.30 0.59 39.90 Colombia IGBC 11,162.90 -0.33 10.22 Currencies Latest Daily YTD pct pct change
Brazil real 3.1383 -0.31 3.53 Mexico peso 17.7905 -0.33 16.60 Chile peso 627.8 -0.92 6.83 Colombia peso 2,910.82 -0.08 3.12 Peru sol 3.239 -0.19 5.40 Argentina peso (interbank) 17.0650 0.09 -6.97 Argentina peso (parallel) 17.77 0.62 -5.35
(Reporting by Bruno Federowski, editing by G Crosse)