EMERGING MARKETS-Emerging markets slip as geopolitics and Fed weigh on risk; Mexico's peso at two-month low

* Mexican peso weakens past 17 per dollar * Brazil's real at lowest since March 2023 * IMF sees smaller economic slowdown in Latam, Caribbean region this year * Latam FX down 1.6%, stocks fall 2.1% (Updated at 3:30pm ET/1930 GMT) By Bansari Mayur Kamdar and Lisa Pauline Mattackal April 16 (Reuters) - Latin American currencies and stocks slumped on Tuesday as the dollar soared on rising geopolitical tensions and fading hopes of a rate cut by the U.S. Federal Reserve. Mexico's peso led Latin American currencies lower with a fall of 2.0%, briefly crossing the 17 to the dollar mark and trading at a nearly two-month low. Juan Perez, director of trading at Monex, said the peso's fall was partly the result of the dollar's jump to ultimate safe-haven asset with the conflict in the Middle East reaching an "uncomfortable point of escalation for all global markets". "A world mostly blurred in its long-term outlooks is now being overwhelmed with negativity and pessimism as tensions in Russia, Ukraine, and now the Middle East seem to indicate they are long-term headwinds to cope with," Perez said. Traders also continued to trim expectations for more than one Federal Reserve interest rate cut this year after comments from Fed Chair Jerome Powell. Emerging markets have been pressured since the start of the year as strong U.S. economic data prompted investors to reprice expectations that borrowing costs in the world's biggest economy would fall significantly in 2024. "I think Powell has changed his tune a little bit today ... the Fed (cutting rates) narrative is still intact, but it doesn't look as compelling as it did at the beginning of the year," said Geoffrey Dennis, independent emerging markets analyst. However, Dennis said there is scope for emerging markets to regain ground as the Fed's policy path becomes more clear. The strength of the greenback pushed the MSCI index for Latin American currencies down 1.6%, heading for its biggest daily fall since February 2023. The broader emerging market currencies index dipped 0.4% to its lowest level since December. Latin American stocks were 2.1% lower, trading at the lowest level since November. The Brazilian real fell 1.5% to 5.2648, its lowest in over one year. The Bovespa index fell 0.5%, with Vale down 1.2% after a local court again suspended the operating license for the miner's Brazilian Sossego copper mine. The International Monetary Fund in its latest World Economic Outlook upgraded its 2024 view for economic output growth in Latin America and the Caribbean to 2% from January's estimate of 1.9%, though it still expects a slowdown. Meanwhile, Sri Lanka rejected international bondholders' proposal to restructure more than $12 billion in debt, putting at risk critical IMF support and delaying efforts to resolve a two-year-long debt crisis. HIGHLIGHTS ** Ukraine bondholders form ad hoc committee for $20 bln talks ** Brazil framework is much bigger than changes in fiscal target, says ministry ** ANALYSIS-China's cycle of dollar hoarding and weakening yuan gets vicious Key Latin American stock indexes and currencies at 1930 GMT: Latest Daily % change MSCI Emerging Markets 1010.06 -2.01 MSCI LatAm 2383.60 -2.07 Brazil Bovespa 124762.38 -0.46 Mexico IPC 55897.79 -0.15 Chile IPSA 6422.73 -0.88 Argentina MerVal 1219841.07 1.863 Colombia COLCAP 1374.14 -0.44 Currencies Latest Daily % change Brazil real 5.2648 -1.56 Mexico peso 17.0382 -1.85 Chile peso 980 -0.18 Colombia peso 3915.63 -0.21 Peru sol 3.7427 -0.50 Argentina peso 868.5000 0.00 (interbank) Argentina peso 1015 0.00 (parallel) (Reporting by Bansari Mayur Kamdar and Lisa Mattackal in Bengaluru; Editing by Kirsten Donovan and Alistair Bell)