(Rewrites with Mexican central bank comment on Mexican peso) SAO PAULO/MEXICO CITY, Dec 28 (Reuters) – Mexico’s peso weakened on Thursday after the central bank expressed concern the inflation outlook has deteriorated, adding the currency could depreciate if talks to renegotiate the North American Free Trade Agreement are unfavorable. The minutes of the Mexican central bank’s Dec. 14 meeting reinforced a more hawkish tone under its new boss, with a majority of the four-person board saying that reaching the 3 percent inflation target will take longer than anticipated. The Mexican peso slipped 0.24 percent. Brazil’s currency was virtually flat and the Chilean peso was up 0.22 percent after data showed a widening U.S. trade gap offset figures demonstrating a continuingly firm labor market. Traders closely track U.S. economic data in search of clues to the pace of U.S. interest rate increases in coming months. Though employment has shown signs of consistent strength, mixed reports on economic activity have fueled bets that the Federal Reserve will be slow in tightening policy, supporting demand for high-yielding emerging market currencies. Traders mostly kept quiet, with little news on the horizon ahead of the New Year’s holiday. Brazil’s benchmark Bovespa stock index rose 0.4 percent, led by shares of loyalty program Smiles Fidelidade SA after it announced it will cut prices of tickets sold

Latin American stock indexes and currencies at 2100 GMT:

Stock indexes daily % YTD % Latest change change MSCI Emerging Markets 1153.31 0.78 32.72 MSCI LatAm 2816.31 0.62 19.58 Brazil Bovespa 76402.08 0.43 26.86 Mexico IPC 48852.87 0.41 7.03 Chile IPSA 5550.93 0.99 33.71 Chile IGPA 27910.38 0.9 34.61 Argentina MerVal 30024.24 2.85 77.47 Colombia IGBC 11436.52 0.58 12.92 Venezuela IBC 1262.80 0 -96.02 Currencies daily % YTD % change change

Latest

Brazil real 3.3141 -0.02 -1.96 Mexico peso 19.7300 -0.24 5.14 Chile peso 614.53 0.22 9.14 Colombia peso 2981.8 -0.25 0.66 Peru sol 3.24 0.00 5.37 Argentina peso 19.2100 -3.98 -17.36

(interbank)

Argentina peso 19.22 -0.88 -12.49

(parallel)

(Reporting by Bruno Federowski; Editing by Steve Orlofsky and Grant McCool)