EMERGING MARKETS-Most Latam currencies rise vs weaker dollar after Powell remarks; Egypt pound tumbles

* Peruvian Prime Minister Alberto Otarola resigns * Egypt signs expanded $8 billion loan deal with IMF * FX flat, stocks add 0.4% (Updated at 3:10pm ET/2010 GMT) By Shashwat Chauhan and Lisa Pauline Mattackal March 6 (Reuters) - Most Latin American currencies rose against the dollar on Wednesday as the greenback lost steam after Federal Reserve Chair Jerome Powell said he expected interest rate cuts this year, while the Egyptian pound tumbled after its central bank devalued the currency. The dollar index was down 0.3% after Powell's comments. "(Powell's testimony was) a similar message to other Fed officials in that they are inclined to cut rates later this year, but need to see more evidence to justify that action," said James Knightley, chief international economist at ING. Leading gains among Latin American currencies was the Mexican peso, up 0.3% against the dollar to 16.8880, a seven-week high. The Brazilian real, the currency of Latin America's largest economy, rose 0.2%, touching one-week highs of 4.9482 versus the dollar. Meanwhile, Egypt's pound sank as low as 50 to the dollar for the first time after its central bank devalued the currency and hiked interest rates by 600 basis points. That was shortly followed by confirmation of an expanded $8 billion deal with the International Monetary Fund. The premium demanded by investors to hold Egypt's international bonds over safe-haven U.S. Treasuries tightened to as little as 529 basis points, its lowest level since June 2021, according to JPMorgan . The spread was last at 580 bps. "Geopolitical developments will continue to play an outsized role in Egypt’s economic stabilization, but the financial and monetary policy elements are now in place," said Geoff Yu, EMEA macro strategist at BNY Mellon. Regional Latin American currencies were also lifted by rising crude oil prices. Oil exporter Colombia's peso gained 0.5%. Argentina's peso on the parallel informal market broke back below the 1,000 per dollar mark, reaching its strongest level since the end of December as investors were reassured by president Javier Milei's pledge last week to continue pushing pro-market reforms. Argentinian shares rose 0.7%. Chile's peso continued its recent dour run, reversing early gains to fall 0.4%, set to decline for the fourth consecutive session. Those losses weighed on MSCI's basket of Latin American currencies which was flat on the day. Peru's sol gained 0.3%. Overnight, Peruvian Prime Minister Alberto Otarola said he had tendered his resignation. A gauge of Latin American stocks gained 0.4%, with heavyweight Brazil's main stock index up 0.6%. HIGHLIGHTS ** EM forex to struggle while Fed stays cautious on rate cuts - Reuters poll ** Polish central bank keeps rates on hold ** Brazil's industrial production posts worst monthly performance in nearly three years ** Argentina industrial output plunges again as austerity bites ** EXCLUSIVE-Mexico's Pemex, Carlos Slim team met to discuss deepwater gas project -sources Key Latin American stock indexes and currencies at 2010 GMT: Latest Daily % change MSCI Emerging Markets 1028.53 0.66 MSCI LatAm 2526.07 0.42 Brazil Bovespa 128892.29 0.62 Mexico IPC 55360.07 -0.21 Chile IPSA 6348.02 1.42 Argentina MerVal 999642.14 0.701 Colombia COLCAP 1312.70 0.91 Currencies Latest Daily % change Brazil real 4.9482 -0.08 Mexico peso 16.8908 0.31 Chile peso 984.3 -0.39 Colombia peso 3922.5 0.45 Peru sol 3.7226 0.26 Argentina peso 845.5000 0.00 (interbank) Argentina peso 970 4.12 (parallel) (Reporting by Shashwat Chauhan in Bengaluru, Editing by Nick Zieminski, William Maclean)