* Latam FX rise as dollar slip after Powell stays dovish * Brazil"s real jumps 1.9% * Chile"s peso up, 25 bps hike expected * America Movil jumps as Q2 profit more than doubles (Updates prices, adds reaction after Powell"s speech) By Ambar Warrick and Susan Mathew July 14 (Reuters) - Brazil"s real shot up 2% on Wednesday after a significant upgrade to the country"s economic growth forecast, while Chile"s peso rose as investors penciled in a possible rate hike by the central bank later in the day. Most other Latin American currencies also rallied strongly as the dollar slumped after U.S. Federal Reserve Chair Jerome Powell held his dovish stance, alleviating fears that rising inflation could see the Fed bring forward policy tightening. The real last traded at 5.077 to the dollar. Brazil"s economy ministry said the country"s GDP was expected to grow 5.3% in 2021, far more than a previous forecast of 3.5%. It added that the country hoped to raise 100 billion reais ($19.64 billion) with a much-awaited income tax reform proposal. The new forecast supports market expectations of improving growth in Latin America"s largest economy, which have also helped the real weather political noise from a growing corruption scandal. Chile"s peso added 0.4%, with investors expecting a 25 basis point rate hike by the bank to 0.75%, given some hawkish commentary from the minutes of the bank"s last meeting. With inflation also on the rise, many expect the bank to step in and curb any further price pressures. Increasing economic growth expectations for the country have also reduced the need for overly accommodative policy. Tighter policy has become a common trend across emerging markets this year, with inflation picking up on reopening momentum. But for EM bonds, Tina Vandersteel, head of emerging country debt at GMO, sees rising inflation as an overall "benign" risk given hawkish central banks. She sees Mexico, Turkey, and South Africa as holding opportunity in sovereign debt. Mexico"s peso added 1%, while Colombia"s peso rose 0.8%, despite tumbling oil prices. Mexico"s peso was recovering from steep losses triggered by fears of government interference in the country"s energy sector. The country also recorded its biggest increase in new COVID-19 infections since February. "In the medium to longer term, we see MXN appreciation potential limited by the fragile economy and subdued growth prospects due to a lack of investment," said Elisabeth Andreae, FX and EM analyst at Commerzbank. Mexican stocks gained on the day, with telecommunications giant America Movil jumping 6% after its said its second quarter net profit more than doubled. Colombia will seek to raise nearly $4 billion through a new tax reform measure to be proposed to Congress, Finance Minister Jose Manuel Restrepo said on Tuesday. Key Latin American stock indexes and currencies: Stock indexes Latest Daily % change MSCI Emerging Markets 1339.33 -0.01 MSCI LatAm 2604.50 1.41 Brazil Bovespa 128315.80 0.12 Mexico IPC 49440.44 0.34 Chile IPSA 4158.69 -0.95 Argentina MerVal 64149.35 -0.35 Colombia COLCAP 1285.43 -0.64 Currencies Latest Daily % change Brazil real 5.0771 2.04 Mexico peso 19.8651 0.95 Chile peso 746.9 0.33 Colombia peso 3790 0.77 Peru sol 3.9543 0.55 Argentina peso 96.1500 -0.02 (interbank) (Reporting by Ambar Warrick Editing by Marguerita Choy) Our Standards: The Thomson Reuters Trust Principles.