EMERGING MARKETS-Latam currencies weaken on euro zone fears

* Madrid mass protests increase tensions in the euro zone
    * Brazil real flat on central bank intervention fears
    * Mexican peso 0.2 pct lower; Chilean peso down 0.1 pct

    RIO DE JANEIRO, Sept 26 (Reuters) - Latin American
currencies fell slightly on Wednesday as growing opposition to
austerity measures in Spain added to jitters over the euro zone
debt crisis, tempering investors' optimism on recent stimulus
measures in the United States.
    The Mexican peso lost 0.2 percent while the Chilean
peso dropped 0.1 percent as investors turned more
averse to emerging markets risk in general.
    The Brazilian real  was near flat, however, in a
seventh consecutive session of very low volatility.
    Worries about the future of the euro zone grew as mass
protests against austerity measures erupted in Madrid, making it
more difficult for Prime Minister Mariano Rajoy to request
international financial aid -- a condition for Spain to receive
support from the European Central Bank.
    Investors fear that a delay in the ECB bond-buying program
would further complicate the euro-zone debt crisis, potentially
dragging more economies into recession.
    "Markets are really bad out there. The losses are triggered
by Spain, which is delaying its request for financial
assistance," said Rodrigo Sarria, a trader at Celfin Capital in
Santiago. He added that the Chilean peso could weaken to around
474.00 per dollar in the short term.
    Chile's currency last traded at 470.60 per dollar. Despite a
possible short-term weakening, the peso remains set to gain in
the medium term as U.S. stimulus measures increase dollar
inflows to emerging markets, said Sarria.
    In Brazil, the real was little changed for yet another
session as investors refrained from making bigger bets in a
market that remains under constant threat of central bank
intervention.
    Brazilian policymakers have bound the real to a very narrow
trading range of 2.0 to 2.1 per dollar as they vow to use all
means necessary to offset capital inflows resulting from the
U.S. Federal Reserve's stimulus measures.
    "Investors got scared with all this intervention talk," said
Gustavo Godoy, manager of the treasury desk of Daycoval bank in
Sao Paulo. "You have the whole world to invest your money, why
bring it to a market that is subject to intervention?"
    Concerns with the global economy drove Brazil's
interest-rate future lower for the fifth consecutive session,
showing a growing number of investors are betting the central
bank will cut the country's base Selic rate again in October.
    At least half of the bets are for a 0.25 percentage point
cut in the Selic in October, the interest-rate curve shows . Earlier this month, the curve showed most investors
betting that Brazil's monetary easing cycle was over.  
    
    Latin American FX prices at 1600 GMT:
    
    
 Currencies                         daily %    YTD %
                                     change   change
                            Latest           
 Brazil real                2.0325    -0.09    -8.07
                                             
 Mexico peso               12.8845    -0.19     8.42
                                             
 Argentina peso*            6.2700     0.80   -24.56
                                             
 Chile peso               470.5000    -0.11    10.37
                                             
 Colombia peso          1,798.1500    -0.06     7.80
                                             
 Peru sol                   2.5960     0.00     3.89
                                             
 * Argentine peso's rate between                    
 brokerages