By Avinash P and Purvi Agarwal

May 28 (Reuters) - Most Latin American stocks fell on Thursday while currencies were mixed in choppy trading as investors cautiously assessed a report that said the U.S. and Iran reached a deal but needed U.S. President Donald Trump's approval.

Axios reported that the two countries reached an agreement on a 60-day memorandum of understanding to extend the ceasefire and launch negotiations, but the deal was pending Trump's approval. The move comes a day after they traded strikes.

Oil prices turned negative following the news, while the dollar index =USD fell 0.3%. Most LatAm currencies pared declines from earlier in the session.

"The bullish sentiment in LatAm has been there for some time now because of their heavy commodity exposure and metal mining leverage... much of it has already been priced in," said Lale Akoner, global market strategist at eToro.

"So, we don't see much upside momentum on the effects based on recent news about the US and Iran possibly moving towards an agreement ... it is very volatile and changes on a day-to-day basis."

Mexico's peso MXN= appreciated 0.1%, while local stocks .MXX down 1%.

Mexico and the U.S. began formal talks on the USMCA - an existing North American free trade agreement, with Washington demanding a new standard to measure origin content for vehicles built in Mexico.

The Bank of Mexico lowered its growth forecast for the economy this year to 1.1%, from 1.6%, warning of weak investment in the country in the latter half of the year due to uncertainty stemming from the negotiations.

Brazil's real BRL= and its stocks .BVSP gained 0.3% each. Gains were limited by a 0.7% decline in state oil firm Petrobras PETR4.SA.

Brazil's central bank will not allow higher inflation expectations to translate into actual inflation, monetary policy director Nilton David said, striking a hawkish tone.

On the flip side, Colombia's peso COP= weakened 0.6% against the dollar in low trading volumes. Its stocks .COLCAP also lost 0.6%.

Markets await the first round of Colombia's presidential election, scheduled for the weekend, amid a tight race between leftist Ivan Cepeda and right-wing Abelardo De La Espriella.

Cepeda has pledged to deepen current President Gustavo Petro's economic and social reforms, while De La Espriella proposes incentives for private investors and boost mining and energy sectors, among others. Analysts expect more pro-growth policies to help the market.

Chile's equities .SPIPSA gained 0.3%, partly tracking higher copper prices, while the currency CLP= was flat.

MSCI's index of Latin American currencies .MILA00000CUS reversed declines to trade 0.3% higher, and the regional stocks gauge .MILA00000PUS was down 0.2%.

Meanwhile, markets also assessed data out of the U.S. that showed inflation increased at its fastest pace in three years in April, that did little to change expectations of monetary policy easing from the Federal Reserve this year.

Key Latin American stock indexes and currencies:

Latin American market prices from Reuters
Equities	Latest	Daily % change
MSCI Emerging Markets .MSCIEF	1727.25	-0.68
MSCI LatAm .MILA00000PUS	3057.31	-0.21
Brazil Bovespa .BVSP	176251.57	0.29
Mexico IPC .MXX	69320.67	-1
Chile IPSA .SPIPSA	10873.13	0.31
Argentina Merval .MERV	3140827.83	2.24
Colombia COLCAP .COLCAP	2181.51	-0.6
Currencies	Latest	Daily % change
Brazil real BRL=	5.0461	0.25
Mexico peso MXN=	17.344	0.06
Chile peso CLP=	893.45	0.02
Colombia peso COP=	3646.88	-0.55
Peru sol PEN=	3.4095	-0.14
Argentina peso (interbank) ARS=RASL	1410	0.18
Argentina peso (parallel) ARSB=	1420	1.41