* Chile"s peso up as Escondida workers, BHP reach temp deal * Brazilian real falls on economic data, political noise * Brazilian fuel distributors slip on likely rising competition (Updates prices throughout, adds background) By Susan Mathew and Shreyashi Sanyal Aug 11 (Reuters) - Most emerging market currencies rose on Wednesday, with Mexico"s peso snapping a three-day losing streak after data showed slower U.S. inflation, which assuaged fears monetary stimulus would taper and sent the dollar diving. The peso rose 0.8% against the dollar to touch its highest level in four days. Mexican President Andres Manuel Lopez Obrador said his administration could use funds disbursed by the International Monetary Fund (IMF) to pay off debt. Bank of Mexico board member Gerardo Esquivel rejected the idea, even as the IMF said last week that its board of governors approved a $650 billion allocation of IMF Special Drawing Rights (SDR). Chile"s peso rose 0.7%, bolstered by the worker union at the Escondida mine and its operator BHP reaching a tentative deal for a new contract. This eased fears that the union will call a strike at the world"s biggest copper mine and reduce production of Chile"s largest export item. South Africa"s rand rose 0.9%, breaking a five-day losing streak. Oil exporter Russia"s rouble pulled away from two-week lows. The dollar index retreated from a more than four-month high after data showed U.S. inflation remained historically high, but the increase slowed in July, in line with Federal Reserve Chairman Jerome Powell"s stance that rising inflation is transitory. "While the market may view this as relief on the inflation front, it"s not likely to really shift the balance of risk for the dollar beyond intra-day noise," strategists at TD Securities said. Peru"s sol was range bound as investors awaited a meeting between the newly-elected administration and central bank chief Julio Velarde regarding the likely extension of his term. Brazil"s real bucked the trend, down 0.3%, as the country"s retail sales volumes fell 1.7% in June from May, data showed, missing expectations for a rise. Political tensions, better fundamentals and a hawkish central bank have helped the currency to cut a chunk of its yearly losses. Brazil"s lower house of Congress voted down a plan by far-right President Jair Bolsonaro to alter the country"s voting system on Tuesday. Shares in the country rose 0.2%, while fuel distributors Petrobras Distribuidora, Ultrapar Participacoes and Cosan slipped between 1.6% and 3.8% after Bolsonaro signed a decree allowing producers and importers of ethanol to directly sell the biofuel to gas stations, increasing competition. Main stock indexes in most other Latam markets rose. Key Latin American stock indexes and currencies at 1847 GMT: Stock Latest Daily % indexes change MSCI Emerging Markets 1298.61 -0.13 MSCI LatAm 2510.90 0.8 Brazil Bovespa 122498.81 0.24 Mexico IPC 51128.60 0.03 Chile IPSA 4361.29 0.37 Argentina MerVal 69203.73 1.736 Colombia COLCAP 1241.98 0.46 Currencies Latest Daily % change Brazil real 5.2129 -0.34 Mexico peso 19.9186 0.82 Chile peso 773.4 0.52 Colombia peso 3942.15 0.55 Peru sol 4.0889 -0.48 Argentina peso (interbank) 97.0400 -0.01 Argentina peso (parallel) 175 1.71 (Reporting by Susan Mathew and Shreyashi Sanyal in Bengaluru; editing by Barbara Lewis and Diane Craft) Our Standards: The Thomson Reuters Trust Principles.