* Brazil retail sales surge in May * Mexican COVID cases spike * Chilean constitution drafting process in focus By Ambar Warrick July 7 (Reuters) - Brazil's real tumbled to a one-month low, with other Latin American currencies falling as investors watched for potentially hawkish commentary from the minutes of the U.S. Federal Reserve's recent meeting. The real sank 0.5% to 5.2346 and was set for a seventh straight session of losses. Concerns over corruption scandals involving top government officials had cost the currency its place as the top performing emerging market unit this year. The real is now trading flat this year, after severely lagging its peers in 2020. But robust economic data in Brazil has supported the real. Data on Wednesday showed retail sales rose in May, with a strong upward revision for April suggesting consumers are shrugging off the COVID-19 pandemic and driving the broader economic recovery. "With improved mobility and renewed fiscal transfers we expect the retail sector to recover visibly in 2Q2021, and to expand further in 2H2021, in tandem with further progress of the Covid vaccination program, gradual reopening of the economy, and renewed fiscal stimulus," Goldman Sachs analysts wrote in a note. Other Latin American currencies retreated as the dollar found its footing ahead of the Fed minutes. Investors will be watching for any further indicators on when the U.S. central bank will begin tightening policy, after it rattled markets with a hawkish tilt last month. Higher U.S. interest rates narrow the gap between risky and risk-free debt, and make emerging market assets appear less attractive. Chile's peso fell 1.2% despite a rise in copper prices, as the country's trade surplus in June narrowed from the prior month. All eyes are now on Chile's process for drafting a new constitution. Delegates on Sunday chose a woman from Chile's majority indigenous Mapuche people to lead them in the process. Losses in Mexico's peso were somewhat muted as data showed exports from the country's large automobile manufacturing sector surged 18.3% in June. But with Mexican COVID-19 cases jumping at their highest rate since late February, investors have grown concerned over a possible new wave of infections in the country. Colombia's peso fell 0.7%, while Peru's sol was flat after thousands of Peruvians took to the streets on Tuesday to protest uncertainty over the result of a presidential election a month ago. Latin American stocks fell 0.4% in early trade, tracking a broader decline in emerging markets. Key Latin American stock indexes and currencies: Latest Daily % change MSCI Emerging Markets 1339.59 -0.52 MSCI LatAm 2513.37 -0.43 Brazil Bovespa 125655.84 0.45 Mexico IPC 49887.05 -0.32 Chile IPSA 4182.40 0.4 Argentina MerVal 63721.95 0.25 Colombia COLCAP 1269.65 -0.19 Currencies Latest Daily % change Brazil real 5.2346 -0.47 Mexico peso 20.0420 -0.15 Chile peso 755.81 -1.23 Colombia peso 3800.96 -0.67 Peru sol 3.9377 0.09 Argentina peso 95.9400 -0.02 (interbank) (Reporting by Ambar Warrick; editing by Jonathan Oatis)
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