* Chile rate decision due
* Chile unemployment rate 8.5% in June quarter
* IMF, Argentina reach staff deal on loan reviews
* POLL-Brazil to kick off monetary easing with small rate cut
* Brazil's jobless rate hits lowest since 2014
(Updated at 1935 GMT)
July 28 (Reuters) - Most Latin American currencies gained on Friday, as the dollar lost steam after easing U.S. inflation bolstered the case for the Federal Reserve to end its interest rate hikes, while focus turned to Chile's policy decision.
The MSCI index for Latam currencies rose 0.1% at 1935 GMT, poised for a third straight week of gains, with the dollar sliding after annual inflation logged its smallest increase in over two years in June, with underlying price pressures also moderating.
Chile's peso was marginally higher, likely on the back of higher copper prices, ahead of a likely 75-basis-point interest rate cut by the central bank, due at 2100 GMT, against the backdrop of easing inflation.
“The economy of Chile has lost momentum and that is what will open the door for a more aggressive easing," said Cassiana Fernandez, head of Latin America economic research at JP Morgan.
"So if they cut by 75 basis points or even 100 basis points, we still see the level of interest rates is enough to cushion a significant move in the currency.”
Data showed Chile's unemployment rate hit 8.5% in the April-June period, below analysts' expectations.
Focus also turned to Argentina after the International Monetary Fund said it has reached a staff-level agreement to unlock $7.5 billion and complete the fifth and sixth reviews of the struggling country's $44 billion loan program.
Mexico's peso rose 1.2% to its highest level in 7-1/2 years and Colombia's peso also rose over 1.5%, on track for its fifth straight week in the green.
Colombia's policy decision is due on Monday, with Scotiabank analysts forecasting rates will likely remain steady.
The Brazilian real was up 0.3%.
Investors remained optimistic about the business environment in Brazil, amid fiscal framework and tax reform in Congress and after rating agency Fitch raised the country's sovereign credit rating along with a stable outlook.
Data showed Brazil's jobless rate during the June quarter fell to its lowest level for the period in nine years, underscoring labor market resilience.
Peru's President Dina Boluarte said she would request legislative powers from Congress for 120 days to fight criminality amid protests demanding her ouster. The sol was down 0.1%.
The MSCI index for Latam stocks gained 0.5%, also eyeing weekly gains, with Argentine in the lead.
Peru's stock market was closed on account of Independence day. (Reporting by Ankika Biswas in Bengaluru; editing by Jonathan Oatis and Marguerita Choy)
