EMERGING MARKETS-LatAm currencies weaken ahead of Fed meeting

SAO PAULO, Sept 18 (Reuters) - Latin American currencies weakened on Monday as traders focused on this week's meeting of the U.S. Federal Reserve, which is expected to announce it will begin trimming its massive portfolio. Investors widely bet that at the end of its two-day meeting on Wednesday, the Fed will take its next step in winding down the massive stimulus it introduced to fight the financial crisis. The U.S. central bank may also offer additional hints about when it intends to raise interest rates again, after a string of mixed economic data cast doubt over its plan to hike for a third time this year. For years, high-yielding emerging market currencies have benefited from steady investor demand as policymakers pumped money into developed economies to bring borrowing costs down. That could fade in coming months as monetary policy returns to pre-crisis standards, although most investors expect that change to take place very slowly. "Luckily for emerging markets, global monetary policy conditions remain amply accommodative in the form of low interest rates by historical standards, and policy normalization should be very gradual in the coming quarters," BNP Paribas economists wrote in a report. The Brazilian real and the Mexican peso both slipped 0.5 percent. Their moves echoed the U.S. dollar's widespread climb in the wake of a rise in U.S. Treasury yields . Brazil's benchmark Bovespa stock index, however, rose past the 76,000 milestone for the first time as hopes that President Michel Temer would implement market-friendly reforms poured additional fuel onto last week's rally. Shares of miner Vale SA tracked iron ore prices higher, adding the most points to the index. Steelmakers followed along, with Usinas Siderúrgicas de Minas Gerais SA the index's biggest percentage gainer. JBS SA dropped 3.8 percent after the head of state bank BNDES said the family calling the shots at the world's largest meatpacker was unfit to run it. The Batista family had named founder José Batista Sobrinho as chief executive officer after his sons were charged with insider trading.

Key Latin American stock indexes and currencies at 1645 GMT:

Stock indexes daily % YTD % change change


MSCI Emerging Markets 1112.20 0.91 27.82 MSCI LatAm 2997.73 0.33 27.65 Brazil Bovespa 76012.64 0.34 26.21 Mexico S&P/BVM IPC 50226.31 0.61 10.04 Chile IPSA 5202.05 0.81 25.31 Chile IGPA 25973.23 0.73 25.27 Argentina MerVal 23667.13 -0.2 39.89 Colombia IGBC 11163.48 0.04 10.22 Venezuela IBC 422995.69 6.42 1234.15 Currencies daily % YTD % change change


Brazil real 3.1279 -0.45 3.88 Mexico peso 17.7450 -0.48 16.90 Chile peso 624.9 0.00 7.33 Colombia peso 2908.37 -0.46 3.20 Peru sol 3.246 0.12 5.18 Argentina peso (interbank) 17.0500 -0.41 -6.89 Argentina peso (parallel) 17.83 0.06 -5.66

(Reporting by Bruno Federowski; Editing by Lisa Von Ahn)