* China retail sales slips in July 
    * Mexican peso set to outperform peers for the week 
    * Latam FX, equity indexes track weekly gains 
    * U.S.-China trade talks over the weekend awaited 

    By Shreyashi Sanyal
    Aug 14 (Reuters) - Most major currencies in Latin America
declined on Friday after disappointing economic data from China,
while Mexico's peso continued its advance for the fourth
straight session on signs that the pace of further monetary
policy easing could slow.
    Figures showed China's retail sales slipped in July, dashing
expectations for a modest rise, as consumers were wary of the
novel coronavirus, while the factory sector's recovery struggled
to pick up pace.
    Risk appetite dwindled among investors following the data as
China remains one of Latin America's biggest export destinations
for agricultural products and metals.  
    Brazil's real slipped 0.5% against the dollar. A
central bank indicator showed economic activity in Brazil
expanded at a record pace in June, ending a torrid quarter on a
more positive footing as the easing of social isolation and
lockdown measures allowed businesses to open up and activity to
recover.    
    The improving economic data and a sagging dollar put the
currency of Latin America's biggest economy on course to rise
for the week.   
    The Chilean and Colombian pesos were pressured
against the dollar, tracking weekly declines. Oil exporter
Colombia's peso headed for its fifth straight weekly slump,
falling 1.1% as demand for crude remained lackluster. 
    The Mexican peso was the only major unit to
strengthen against the greenback, a day after the central bank
cut borrowing costs to 4.5%, the lowest level in four years, but
there were signs the pace of cuts could slow, with one board
member favoring a smaller reduction.     
    The currency also outperformed Latin American peers for the
week, rising 1.4%.
    "With the economy already in recession last year and with
rates so high relative to most of Mexico's peers, there is room
to cut without it leading to a currency crash," said analysts at
Rabobank. 
    The analysts also said that even if interest rates come down
to 3.5%, the Mexican peso would still be the most attractive
carry currency when adjusting for liquidity and volatility.
    Investors are now awaiting a meeting between U.S. and
Chinese officials over the weekend about their Phase 1 trade
deal amid deteriorating relations between the world's two
largest economies.
    Key Latin American stock indexes and currencies at 1500 GMT:
    
      Stock indexes                Latest      Daily %
                                                change
 MSCI Emerging Markets               1092.49       -0.34
                                              
 MSCI LatAm                          2018.02         0.8
                                              
 Brazil Bovespa                    101335.53        0.87
 Mexico IPC                         38956.70        0.88
 Chile IPSA                          4022.37        0.43
                                              
 Argentina MerVal                   49424.54      -0.408
                                              
 Colombia COLCAP                     1146.97       -0.26 Currencies                Latest      Daily %
                                                change
 Brazil real                          5.3920       -0.48
                                              
 Mexico peso                         22.0260        0.48
                                              
 Chile peso                              796       -0.44
                                              
 Colombia peso                       3781.22       -0.51
 Peru sol                             3.5778       -0.22
                                              
 Argentina peso (interbank)          73.1500       -0.05
                                              
 Argentina peso (parallel)               128        3.91
                                              
 

 (Reporting by Shreyashi Sanyal in Bengaluru; editing by
Jonathan Oatis)