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Updated at 1945 GMT

By Johann M Cherian and Lisa Pauline Mattackal

Sept 9 (Reuters) - Mexico's peso and stocks rose on Monday, outperforming many regional peers as most currencies dipped against a firmer U.S. dollar as investors pushed back bets on a 50 basis point interest rate cut from the Federal Reserve.

Mexico's main equities index .MXX rose 0.1% after data showed headline inflation in the region's second-largest economy eased to 4.99% in August, boosting expectations that Banxico will lower borrowing costs when it meets later this month.

The oil exporter's peso MXN= appreciated 0.4% tracking higher crude prices, and rebounded from losses logged in the previous three weeks. Still, the currency was far from a more than one-year low.

The peso has been hit over the past several weeks by worries about the impact of a highly contentious judicial reform proposal. Senators on Sunday backed the proposal at the commission stage and it is expected to be voted on later in the week.

"Mexico's Senate has passed the constitutional bill yet, but it may do so this week," said Thierry Wizman, Global FX & Rates Strategist at Macquarie.

"No one really knows what will happen, and we're reserving judgement on where the MXN may go until we get clarity."

Brazil's real BRL= rose 0.3% ahead of an inflation report due later in the week, reversing earlier losses.

A weekly central bank survey found Brazilian economists anticipate a rate hike at this month's monetary policy meeting.

Sources said the government is considering tax hikes that do require congressional approval to balance this year's budget.

Most Latin American currencies slipped against a firmer greenback, as investors scaled back expectations for an outsized 50-basis point rate cut by the Federal Reserve ahead of a U.S. inflation report later in the week.

Colombia's peso COP= dipped 1.5% after Friday data showed consumer prices rose less than expected in August, while Chile's peso CLP= and Peru's sol PEN=PE dipped 0.1% and 0.4%.

Mexican peso gains lifted MSCI's index tracking Latin American currencies .MILA00000CUS 0.2%. On the equities front an index .MILA00000PUS tracking regional bourses added 0.4%.

Brazil's Bovespa .BVSP gained 0.1% aided by a rise in energy stocks, Colombian stocks .COLCAP fell 0.5% and Argentina's MerVal index .MERV climbed 1%.

Among single stocks, shares of Mexican retailer La Comer LACOMERUBC.MX jumped 5.5% after the S&P Dow Jones said the stock would be preliminarily included in its S&P/BMV IPC index as part of a reshuffle.

YPF YPFDm.BA fell 1.3% after the U.S. government said it may get involved in a dispute over whether Argentina should give up its 51% stake in the oil and gas company to help satisfy a $16.1 billion court judgment.

Argentina's central bank sold $165 million to intervene in the forex market, traders told Reuters.

Key Latin American stock indexes and currencies:

(Reporting by Johann M Cherian and Lisa Mattackal in Bengaluru; Editing by Ken Ferris)

((johann.mcherian@thomsonreuters.com;))