* Mexican peso falls for second straight day * Brazil real hit by fiscal, political woes * Peruvian sol dips as govt plans mining taxes (Adds details, updates prices) By Shreyashi Sanyal and Ambar Warrick Aug 26 (Reuters) - Latin American currencies fell on Thursday as caution kicked in ahead of a major U.S. Federal Reserve summit, while the spread of the Delta coronavirus variant and a dip in commodity prices weighed on local assets. Mexico"s peso fell 0.6%, while Brazil"s real shed 0.8% as oil and base metal prices retreated. The dollar rose from one-week lows, supported by gains in U.S. Treasury yields as investors continued to focus firmly on what signals the Fed might send at its annual conference. All eyes will be on Fed chief Jerome Powell"s speech on Friday, where he could signal when the U.S. central bank plans to start unwinding its monetary stimulus. Brazil"s real snapped a two-day winning streak. While the government marked some progress in negotiations with the Supreme Court in delaying mandated payments, concerns over stretched fiscal spending, especially due to the pandemic, still clouded the country"s economic outlook. "With the introduction of dividend taxation and the reduction of the corporate tax rate, this reform should reduce Brazil"s short-term fiscal risk by increasing the tax burden on investment," said Cecilia Godoy, analyst for Latin America Research at FrontierView. "Still, political pressures to spend during next year"s election cycle will remain elevated, continuing to pose credible threats to the spending cap rule, Brazil"s main fiscal anchor." Mexico"s peso extended losses into a second day, after data showed the country"s economy expanded at a slower-than-expected pace in the second quarter. Minutes of the Mexican central bank"s recent meeting showed some members of the rate-setting board believed inflation could rise further this year, suggesting that more interest rate hikes by the bank were a possibility, which could support the peso. Mexican President Andres Manuel Lopez Obrador also allayed some fears over oil production in the country after he said Petroleos Mexicanos (Pemex) will produce about 1.8 million barrels per day (bpd) by year end, despite a fire that has knocked out a big chunk of output. Chile"s peso fell 0.3%, tracking declines in the prices of its top export, copper. World No. 2 copper producer Peru"s sol dipped 0.1% after Peruvian Prime Minister Guido Bellido said the government plans to tax mining companies in the event of high commodity prices, as part of a tax overhaul. Latam stocks were weaker, taking cues from the rest of the globe. Mexican stocks dropped 0.4% from near-record highs. Key Latin American stock indexes and currencies: Latest Daily % change MSCI Emerging Markets 1266.53 -0.69 MSCI LatAm 2445.84 -1.01 Brazil Bovespa 119293.09 -1.26 Mexico IPC 52159.51 -0.36 Chile IPSA 4445.77 0.18 Argentina MerVal 72317.48 0.428 Colombia COLCAP 1316.44 -1 Currencies Latest Daily % change Brazil real 5.2508 -0.77 Mexico peso 20.3404 -0.62 Chile peso 785.9 -0.33 Colombia peso 3865.75 -0.06 Peru sol 4.0745 -0.09 Argentina peso 97.5200 -0.02 (interbank) (Reporting by Shreyashi Sanyal and Ambar Warrick in Bengaluru; editing by Jonathan Oatis) Our Standards: The Thomson Reuters Trust Principles.