EMERGING MARKETS-Mexico's peso leads Latam FX lower as Fed rate-cut cheer ebbs

* Brazil's services sector activity rises in Nov * Comments from Fed's Waller awaited * Latam stocks drop 1.5%, FX down 0.8% By Amruta Khandekar Jan 16 (Reuters) - The Mexican peso led declines in Latin American currencies on Tuesday while stocks were also in the red as investors grappled with the possibility that the U.S. Federal Reserve may not cut interest rates as soon as previously expected. MSCI's index for Latin American currencies slid 0.8%, with Mexico's currency down 1.5%. The peso, which enjoyed gains of nearly 15% in 2023 due to its interest rate differential with the U.S. has lost momentum this year, nudging past the 17 to the dollar mark. Globally, risky assets suffered while the U.S. dollar and Treasury yields rose as hopes of rate cuts from global central banks in March were dampened by hawkish remarks from some European Central Bank officials. Escalating disruptions to Red Sea shipping amid the Israel-Hamas conflict also weighed on sentiment. "Markets again have a risk-off feeling to them," said Juan Manuel Herrera, senior economist at Scotiabank in a note. "Middle East/Red Sea risks continue to grow, and central bankers are starting to highlight how this is a risk to recently encouraging inflation data due to supply chain disruptions." The Brazilian real fell 0.8% against the dollar, also hurt by falling iron ore prices. Brazil is a major iron ore exporter. Services activity in Brazil rose in November for the first time in four months, data from statistics agency IBGE showed on Tuesday, as financial services and activities related to Taylor Swift concerts provided a boost. Chile's peso declined 1.1% against the dollar. The currency of the leading copper exporter also took a hit from a dip in the red metal's prices. The Peruvian sol rose 0.1%, while the Colombian peso was down 1%. Assets in resources-rich Latin America have stumbled in the first few weeks of 2024 on fading optimism around lower borrowing costs in the U.S. this year, though strength in commodity prices kept declines in check. Investors are now awaiting comments from Fed Board Governor Christopher Waller to gauge the central bank's rate path. A gauge of Latin American stocks dropped 1.6% on Tuesday. Heavyweight Brazilian shares slipped 0.8% on a drag from financial stocks and miners. Equities in Chile edged 0.2% lower while Argentina's MerVal index inched up 0.2%. The Argentinian peso weakened to 1,120 per dollar in parallel black market trade. Key Latin American stock indexes and currencies at 1457 GMT: Stock indexes Latest Daily % change MSCI Emerging Markets 979.61 -1.56 MSCI LatAm 2551.83 -1.56 Brazil Bovespa 130443.48 -0.82 Mexico IPC 0.00 0 Chile IPSA 5984.20 -0.2 Argentina MerVal 1039672.45 0.127 Colombia COLCAP 1295.82 -0.12 Currencies Latest Daily % change Brazil real 4.9039 -0.80 Mexico peso 17.1360 -1.51 Chile peso 921.1 -1.18 Colombia peso 3943.15 -1.08 Peru sol 3.7111 0.11 Argentina peso 818.1000 -0.04 (interbank) Argentina peso 1120 0.00 (parallel) (Reporting by Amruta Khandekar; Editing by Sharon Singleton)