EMERGING MARKETS-Latin American currencies advance as dollar weakens following Powell's remarks

* Peruvian Prime Minister Alberto Otarola resigns * Egypt signs expanded $8 billion loan deal with IMF * FX up 0.2%, stocks add 0.9% By Shashwat Chauhan March 6 (Reuters) - Most Latin American currencies appreciated against the dollar on Wednesday, as the greenback lost steam following remakes from Federal Reserve Chair Jerome Powell, while advancing commodity prices helped local stock markets. At 10:03 a.m. ET (1503 GMT), MSCI's index for Latin American currencies advanced 0.2%, on track for its fourth straight daily gain. The dollar index, which measures the greenback against a basket of global peers, was down 0.3% as investors took stock of Powell's latest remarks. In remarks prepared for delivery to the House Financial Services Committee, the Fed Chair said that continued progress on inflation "is not assured," though the central bank still expects to reduce its benchmark interest rate later this year. "Chair Powell stuck closely to the standard Fed script in his written Monetary Policy Testimony, breaking no new ground," said Ian Shepherdson, chairman and chief economist at Pantheon Macroeconomics. "His key points are just a repeat of the January FOMC statement and subsequent remarks by Mr. Powell and other FOMC members." Leading gains among local peers was the Mexican peso, up 0.5% against the dollar, touching seven-week highs. An advance in crude oil prices also helped exporter Mexico's currency, while fellow exporter Colombia's peso also gained 0.2%. Currency of Latin America's largest economy, the Brazilian real was up 0.4%, touching one-week highs. Separately, official data showed Brazil's industrial production posted in January its worst monthly performance in nearly three years, dipping slightly more than markets expected and reversing some gains seen in late 2023. A weaker dollar gave a leg up to copper prices, which lifted top producer of the red metal Chile's peso up 0.2%, its first advance in three sessions. Peru's sol was flat at 3.7289 after rising close to 1% in the previous session. Overnight, Peruvian Prime Minister Alberto Otarola said he had tendered his resignation after an audio recording came out over the weekend purporting to be of the official attempting to improperly influence government contracts. A gauge of EM stocks gained 0.9%, with heavyweight Brazil's main stock index up 0.7%. Argentinian shares were up 1.5%, and Mexico's main index gained 0.3%. Amongst headlining stocks, Brazilian oil company Petroreconcavo fell 5.6% after reporting fourth quarter results. Elsewhere, Egypt's prime minister said the International Monetary Fund (IMF) will increase its current loan program with Egypt by $5 billion. HIGHLIGHTS ** EM forex to struggle while Fed stays cautious on rate cuts, as per a Reuters poll ** Polish central bank keeps rates on hold amid inflation uncertainty ** US private payrolls gains slightly below expectations in February Key Latin American stock indexes and currencies at: Latest Daily % change MSCI Emerging Markets 1029.20 0.73 MSCI LatAm 2538.21 0.9 Brazil Bovespa 128926.83 0.65 Mexico IPC 55643.26 0.3 Chile IPSA 6333.35 1.19 Argentina MerVal 1007392.47 1.482 Colombia COLCAP 1314.51 1.05 Currencies Latest Daily % change Brazil real 4.9380 0.34 Mexico peso 16.8580 0.50 Chile peso 979.2 0.13 Colombia peso 3931.42 0.22 Peru sol 3.7298 0.06 Argentina peso 845.5000 0.00 (interbank) (Reporting by Shashwat Chauhan in Bengaluru, Editing by Nick Zieminski)