* Mexican peso, South African rand lead EM losses * U.S. October consumer prices jump more than expected to 6.2% * Brazil"s consumer prices rise 1.25% in October (Writes through with focus on Latin America) By Ambar Warrick Nov 10 (Reuters) - Latin American currencies sank on Wednesday, with Mexico"s peso leading losses as a jump in U.S. consumer price inflation fueled expectations of early rate hikes in the developed world, denting risk-sensitive assets. The peso fell 1.3%, with anticipation of a central bank meeting on Thursday also fuelling volatility in the currency. A Reuters poll expects the central bank to hike rates by 25 basis points to 5.0%. But investors have been insisting on a sharper pace of hikes, especially as data this week showed Mexican inflation surged in October. U.S. consumer prices also increased more than expected in October, pointing to more pressure on high-yielding emerging market currencies such as the Mexican peso and the South African rand. The rand slumped 2.6% after the data, severely lagging its peers. The data raises the possibility of an early interest rate hike by the Federal Reserve, which bodes poorly for risky assets, as it raises debt burdens and narrows interest rate differentials for currencies. "The Federal Reserve is starting to taper its stimulus and might be forced to hike interest rates sooner due to rising inflation," said Nancy Davis, founder Quadratic Capital Management. Brazil"s real was flat as data showed consumer prices, as measured by the benchmark IPCA index, rose above market forecasts in October. The data points towards more rate hikes by the central bank, which could potentially stifle economic growth in 2022. Brazil"s Chamber of Deputies approved a proposal towards increasing fiscal spending, adding to concerns over Brazil"s economic stability. Now, the proposal must go to the Senate, where it needs to be approved in two rounds of voting to enter into force. President Jair Bolsonaro has been pushing for the bill seeking to expand his social welfare program ahead of elections next year as his popularity slides. It is becoming clearer that the government and its allies have the numbers to block the amendment proposals and most likely approve the bill, said Citi strategists. "We believe this reinforces the thesis that the approval of the (proposal) may allow the market to move on without too much of a negative impact," they said, but warned that the Senate discussion keeps risks alive. Most other Latin American currencies fell, with MSCI"s index of regional units down 0.5%. Peru"s sol fell 0.3% as protesters blocked the Las Bambas copper transport road again, raising fears of more disruptions to the country"s top export. Key Latin American stock indexes and currencies: Latest Daily % change MSCI Emerging Markets 1273.99 0.08 MSCI LatAm 2176.46 -0.47 Brazil Bovespa 106658.96 1.06 Mexico IPC 51669.41 -0.85 Chile IPSA 4472.43 0.04 Argentina MerVal 96093.14 1.814 Colombia COLCAP 1363.18 -1.55 Currencies Latest Daily % change Brazil real 5.4910 -0.01 Mexico peso 20.5630 -1.27 Chile peso 794.8 -0.43 Colombia peso 3875.03 -0.27 Peru sol 4.0216 -0.30 Argentina peso 100.1300 -0.01 (interbank) (Reporting by Shashank Nayar and Susan Mathew in Bengaluru; Editing by Bernadette Baum and Alistair Bell)