* MSCI Latam stocks index comes off 3-month high * Argentine stocks drop amid debt restructuring talks * Brazil's real should remain below 5 to the dollar- analyst (Adds details, updates to close) By Susan Mathew and Ambar Warrick June 9 (Reuters) - Latin American stocks and currencies fell on Tuesday as investors cashed in after a stellar risk rally over the last few sessions, with all eyes now on a U.S. Federal Reserve meeting. As most Wall Street indexes pulled back, Brazil's Bovespa and Colombia's COLCAP index broke a seven-session winning run, while Chilean stocks fell after six sessions. Mexican shares lost 1.7%. The declines caused the broader Latin American shares benchmark to come off a three-month high hit on Monday. The recent rally was spurred by bets of a quicker than expected economic recovery from a pandemic-fueled lull, and helped emerging market assets recover significantly from this year's lows hit in March. Still, doubts persist over Latin American assets, as the virus exacerbates weak economic fundamentals and political uncertainty. The market's focus turned to the Fed's two-day meeting beginning on Tuesday. The central bank is expected to keep interest rates unchanged but the focus will be on whether policymakers still sound cautious and introduce new measures, or reinforce the upbeat tone set by the recent jobs data. "With the U.S. economy showing signs of a rebound, our base case suggests the Fed should be quite constructive for risky assets," said Ned Rumpeltin, European head of FX strategy at TD Securities. But he added that it need not necessarily translate to dollar weakness. As oil prices slipped, currencies of crude exporters Mexico and Colombia slid 1.7% and 1.9% respectively, retreating from three-month highs. Data on Tuesday showed Mexican consumer price inflation accelerated less than expected in May, remaining below the central bank's target rate and creating room for more potential interest rate cuts. Brazil's real fell 1%. Brazilian central bank director Fabio Kanczuk said that while recent short-term changes in asset prices will not affect the bank's monetary policy, inflation would be watched. "The real has recently been able to benefit significantly from the improved sentiment on the financial markets. However, the domestic news flow remains worrying," said You-Na Park-Heger, an analyst at Commerzbank. "Against this backdrop, we consider the recent recovery to be exaggerated and see the risk of a downward correction in the real. In the medium term, however, the dollar-real should remain below the 5.00 mark." Argentine stocks dropped more than 5% as restructuring talks over its sovereign debt reached a final sensitive stretch. Key Latin American stock indexes and currencies: Stock indexes Latest Daily % change MSCI Emerging Markets 1009.47 0.2 MSCI LatAm 2099.40 -0.85 Brazil Bovespa 96674.69 -0.99 Mexico IPC 38978.13 -2.44 Chile IPSA 4124.43 -0.37 Argentina MerVal 46382.91 -5.111 Colombia COLCAP 1205.76 -1.83 Currencies Latest Daily % change Brazil real 4.9024 -1.00 Mexico peso 21.8480 -1.63 Chile peso 769.8 -0.18 Colombia peso 3655.5 -1.50 Peru sol 3.4427 -0.23 Argentina peso 69.1600 -0.12 (interbank) (Reporting by Susan Mathew in Bengaluru; Editing by Dan Grebler and Tom Brown)
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