EMERGING MARKETS-Latam assets rise; Brazil's real steady ahead of expected rate cut

* Brazil central bank seen cutting rates to record low of 2% * Most Latam currencies rise against weakening dollar * Petrobras lifts Bovespa as oil prices jump By Shreyashi Sanyal Aug 5 (Reuters) - Most Latin American currencies rose against a weaker dollar on Wednesday, while Brazil's real remained steady ahead of what is expected to the central bank's final interest rate cut in its one-year long easing cycle. The real firmed 0.2% against the dollar as Copom, the central bank's rate-setting committee, is set to cut its key interest rate to a record low of 2.00% later in the day in a final 25 basis points move to cushion an economic collapse. The cut would be the ninth of an easing cycle that started a year ago, as policymakers initially sought to boost the economy in light of President Jair Bolsonaro's poor results in attracting more investment at the beginning of his term. "Following the massive collapse in growth caused by COVID, the current economic indicators in Brazil are signaling an economic recovery, but pre-crisis levels are still a long way off," said Alexandra Bechtel, forex and emerging markets analyst at Commerzbank. "The bar is set high for further rate cuts, in particular as more stable framework conditions (budget deficit etc.) would be required for lower rate levels." Economic activity in Brazil contracted in July for a fifth straight month, a survey of purchasing managers' activity showed, a result of the dominant services sector still struggling under the weight of the COVID-19 crisis. Mexico's peso rose for the first time in seven sessions, gaining more than 1% as the greenback extended declines after a U.S. coronavirus relief package stalled in Congress. A jump in oil prices on a drop in U.S. crude inventories, also supported the Mexican peso as well as oil-exporter Colombia's peso. Even as Latin American assets recovered sharply from March lows, a bounce back to pre-pandemic levels is yet to happen. Economists at Scotiabank say it will take several quarters to return to pre-COVID-19 levels of economic activity even with strong growth into 2021. Stocks in the region outperformed emerging market peers, with MSCI's gauge for Latin American equities surging 2.7%. Brazil's Bovespa led the gains with a 2% rise, as energy company Petrobras jumping more than 6%, tracking higher crude prices. Mexican stocks added 1.2%, as mining company Industrias Peñoles, one of the world's largest silver producers, soared 11% on rising prices of precious metals. Argentina's peso was rangebound a day after reaching an agreement with creditors to restructure around $65 billion in sovereign debt. Key Latin American stock indexes and currencies: Stock indexes Latest Daily % change MSCI Emerging Markets 1102.65 1.2 MSCI LatAm 2055.45 2.66 Brazil Bovespa 103366.60 2.12 Mexico IPC 37844.48 1.01 Chile IPSA 3971.34 1.15 Argentina MerVal 53406.73 2.339 Colombia COLCAP 1143.23 1.31 Currencies Latest Daily % change Brazil real 5.2748 0.16 Mexico peso 22.4322 0.96 Chile peso 776.2 -0.61 Colombia peso 3778.14 0.03 Peru sol 3.5447 0.17 Argentina peso 72.6100 -0.06 (interbank) Argentina peso 125 2.40 (parallel) (Reporting by Shreyashi Sanyal in Bengaluru Editing by Marguerita Choy)