* Mexico peso gains on rising oil prices * Brazil’s economic activity in July beats estimates By Johann M Cherian Sept 19 (Reuters) – Most Latin American currencies steadied against the dollar on Tuesday, with a surge in oil prices helping the Mexican peso as investors await the central bank decisions in the United States and Brazil. The Mexican peso advanced 0.3% as the crude exporter benefited from a jump in oil prices as weak U.S. shale output compounded supply concerns from extended production cuts by OPEC+ members Saudi Arabia and Russia. Brent crude climbed over 1% to $95 per barrel. Also aiding gains in Mexico’s peso, economy likely grew 3.4% in August compared with the same month a year earlier, a preliminary estimate showed. The Brazilian economy kicked off the third quarter with a stronger-than-expected pace, bolstering recent upward revisions in the country’s GDP growth forecast for 2023. “Going forward, we expect activity to benefit from fiscal and quasi-fiscal stimulus, expansion of the real wage bill, and firmer consumer and business confidence,” analysts at Goldman Sachs said in a note. However, the country’s real currency slipped 0.1%, tracking weak iron ore prices. Currencies of resource-rich Latin America strengthened last week as signs of stabilization in China’s economy underpinned sentiment, while signs of easing inflation against a resilient macro backdrop further aided risk sentiment. The outlook for EM currencies will be further determined this week as the Federal Reserve looks set to hold interest rates on Wednesday, though the potential for further rate rises is uncertain. Investors also await an interest rate decision from the Brazil’s central bank, where economists expect the monetary easing cycle to extend further with a 50 basis points cut to 12.75% on Wednesday. Meanwhile, major copper producer Peru’s sol was a laggard, shedding 0.5% as prices of the red metal took a hit on demand concerns. Markets in the continent’s other top copper producer, Chile, were closed on account of a public holiday. Equities markets in the region were weaker, with Brazil’s Bovespa, Mexico’s IPC and Colombia Colcap slipping about 0.2%. Meanwhile, international sovereign dollar bonds issued by Armenia and Azerbaijan suffered sharp falls after Baku launched military action in the Nagorno-Karabakh region, a step that could presage a new war in the volatile area. Armenia’s bond maturing in 2029 dropped as much as 1.5 cents on the dollar to trade at 81.4 cents, their lowest level since March, Tradeweb data showed. Key Latin American stock indexes and currencies: Latin American market prices from Reuters Latest Daily % change MSCI Emerging Markets 974.11 -0.21 MSCI LatAm 2392.14 -0.12 Brazil Bovespa 118114.43 -0.15 Mexico IPC 51647.85 -0.07 Chile IPSA Argentina MerVal 570259.64 -2.554 Colombia COLCAP 1098.77 -0.11 Currencies Latest Daily % change Brazil real 4.8576 -0.05 Mexico peso 17.0799 0.30 Chile peso Colombia peso 3901.32 0.00 Peru sol 3.7169 -0.54 Argentina peso (interbank) 349.9500 0.01 (Reporting by Johann M Cherian and Sruthi Shankar in Bengaluru Editing by Nick Zieminski)