* Chile economic activity below expectations
* Brazilian real hits over two-year low
* Safe haven assets such as U.S. dollar on the rise

By Lisa Pauline Mattackal and Shashwat Chauhan
       Aug 1 (Reuters) - 
    Most Latin American currencies slipped on Thursday as
investors shied away from risky assets amid elevated
geopolitical worries, boosting traditional safe-haven assets
such as the U.S. dollar.
        Global markets were on edge after Hamas leader 
    Ismail Haniyeh
     was assassinated in the Iranian capital Tehran early on
Wednesday morning, an attack that drew threats of revenge on
Israel and fuelled further concern that the conflict in Gaza was
turning into a wider Middle East war.
  
        Traditional safe-haven assets such as the greenback
 and the Swiss franc appreciated, while most
currencies in Latin America, generally considered as risky, fell
with MSCI's index for the region down 1.2%.
  
        Brazil's real led losses, down 1.5% to 5.73 per
dollar, hitting its lowest level in over two years, a day after
its central bank held interest rates and warned "more vigilance"
was necessary due to worsening inflation expectations and recent
market swings.
    "The unquestionable deterioration in the inflation outlook
pushed Copom to escalate the hawkish tone, although not yet
indicating an imminent interest rate hike," analysts at Citi
wrote in a note.  
    Chile's peso reversed initial gains and was last down
1%. Chile's central bank on Wednesday had held its benchmark
interest rate at 5.75% in a unanimous vote, in line with
traders' expectations and marking the first time the bank has
held the rate since the easing cycle began.
        Separately, the country's 
    IMACEC economic activity index
     grew 0.1% in June compared with a year earlier, well below
the 1.7% growth expected by economists polled by Reuters.
  
        Mexico's peso dropped and Colombia's peso
shed 0.9% each.
  
        Peru's sol fared better than most, down 0.5%
against the dollar. Data showed 
    annual inflation
     in the country slowed to 2.13% in July even as consumer
prices, mainly for food and transportation, rose for the second
consecutive month. 
  
    The dollar's gains and weaker global manufacturing data,
notably in China, further dented gains for emerging markets
assets after the U.S. Federal Reserve signaled on Wednesday they
could cut rates in September. 
    Emerging markets were somewhat bolstered in July on hopes
for easier policy in the U.S., but were hit as a global equity
selloff, resurgent geopolitical worries and signs of softening
economic growth in economies like China have weighed.
    On the equities front, MSCI's index of Latin American stocks
 shed 1.9% following an over 1% jump in the last
session. Most local bourses fell, in-line with a bruising
selloff on Wall Street.
    Colombia's EcoPetrol lost 2.3% after Occidental
Petroleum said the Colombian company will not buy a
stake in shale oil producer CrownRock after reporting last month
they were in talks for a potential stake sale.  
    Elsewhere in Latin America, tensions in Venezuela remained
high amid protests over the results of its presidential
election. 
    

    HIGHLIGHTS 
    ** Ukraine paid $200 mln to holders of GDP warrants,
ministry says
        *
* Foreign investment in Latin America fell in 2023: ECLAC
  
    ** SPECIAL REPORT - How Africa's 'ticket' to prosperity
fueled a debt bomb
    ** China securities official expected to lead Shenzhen stock
exchange, say sources
    
    Key Latin American stock indexes and currencies:
    
    
                                        
                                        
                                        
                                        
                                        
                                        
                                        
 MSCI Emerging Markets         1086.01             0.11
                                        
 MSCI LatAm                    2156.83            -1.90
 Brazil Bovespa              127257.81            -0.31
 Mexico IPC                   52352.05             -1.4
 Chile IPSA                    6389.61            -0.79
 Argentina Merval            1500945.0           -0.454
                                     7  
 Colombia COLCAP               1337.21            -0.63
                                                       
                                        
                                        
                                        
                                        
                                        
                                        
                                        
 Brazil real                    5.7388            -1.57
 Mexico peso                    18.776            -0.95
 Chile peso                      951.9               -1
 Colombia peso                 4082.57            -0.86
 Peru sol                       3.7385            -0.49
 Argentina peso (interbank)      931.5     -0.053676865
                                        
 Argentina peso (parallel)        1360      0.735294118
                                        
 

 (Reporting by Lisa Mattackal and Shashwat Chauhan in Bengaluru;
Editing by Chris Reese and Diane Craft)