EMERGING MARKETS-Latam markets slide as dollar soars after hot US inflation data

* JPMorgan downgrades EM FX, local rates * Consumer prices in Brazil up by less than expected in March * Chile to cut interest rate to 6% at next meeting, poll suggests * Latam currencies fall 2.3%, EM currencies off 1.1% (Updated at 3:45pm ET/1945 GMT) By Bansari Mayur Kamdar April 10 (Reuters) - Currencies and stocks in Latin America slipped on Wednesday, tracking the global risk-off mood and as the dollar rallied after a stronger-than-expected U.S. inflation report tempered hopes for interest-rate cuts in the world's largest economy. The MSCI index for Latin American currencies shed 1.1%, while the broader Latam shares index slid 2.3%, the biggest daily decline for both since October. The dollar index, which measures the greenback against six rivals, jumped 0.9%, as traders slashed bets on a Federal Reserve interest rate cut in June after the U.S. Consumer Price Index (CPI) rose more than expected in March. "Should the Fed get backed into a corner and hold rates steady longer than expected, we should expect some volatility in the currency markets," said Jeffrey Roach, chief economist for LPL Financial. Chile's peso shed 1.4% against the dollar, leading losses in the region. Chile's central bank is expected to lower its benchmark interest rate by 50 basis points to 6% at its next meeting at the end of May, according to a poll of analysts released by the monetary authority. The carry trade, which involves borrowing in a low interest rate currency to invest in a higher yielding one, has been effective for years and has particularly benefited currencies in Latin America. However, its strength is waning as some regional central banks start to cut rates even as major developed market central banks look to keep rates higher for longer. Following the U.S. data, JP Morgan downgraded its view of emerging market currencies and local rates to "market weight," citing a difficult path forward as markets reprice Fed rate expectations. Colombia's peso fell 0.9% against the greenback while the Brazilian real slid 1.4% against the dollar, both on track for their worst daily performance since January. Data showed consumer prices in Brazil as measured by the benchmark IPCA index, rose less than expected in March. Brazil's energy minister Alexandre Silveira said on Tuesday that he respects Petrobras' Chief Executive Jean Paul Prates, and that any decision regarding the CEO is to be made by Brazil's President Luiz Inacio Lula da Silva. Stocks in Brazil fell 1.5%. The broader emerging market stocks index inched slightly higher, while emerging market currencies eased 0.4%. HIGHLIGHTS: ** Fitch cuts outlook on China's sovereign credit rating to negative ** Czech inflation stays at 2% target ** Thai central bank holds key rate, defies government calls for cuts ** World Bank cuts Latam 2024 GDP forecast Key Latin American stock indexes and currencies at 1945 GMT: Latest Daily % change MSCI Emerging Markets 1054.75 -0.06 MSCI LatAm 2526.35 -2.28 Brazil Bovespa 127967.96 -1.48 Mexico IPC 56642.21 -1.61 Chile IPSA 6689.07 0.29 Argentina MerVal 1235064.72 -1.448 Colombia COLCAP 1396.16 -0.88 Currencies Latest Daily % change Brazil real 5.0769 -1.40 Mexico peso 16.4328 -0.31 Chile peso 953.9 -1.36 Colombia peso 3805.32 -0.94 Peru sol 3.7046 -0.67 Argentina peso 865.0000 0.00 (interbank) Argentina peso 980 2.04 (parallel) (Reporting by Bansari Mayur Kamdar and Lisa Mattackal in Bengaluru; editing by David Evans and DIane Craft)