* LatAm FX mostly stronger after Greek bailout approved
* MSCI's LatAm stock index dips, Brazil a drag
By Daniel Bases
NEW YORK, May 3 (Reuters) - Latin American currencies edged higher on Monday after an agreement to provide Greece with a 110 billion euro fiscal rescue package.
However with much of Europe on holiday, light trading volumes kept any rallies to a minimum that could, as one economist put it, lead to some "upside follow-through tomorrow."
European Union and International Monetary Fund support for Greece raised hopes the euro zone could contain sovereign debt problems and prevent them from impacting global markets.
"There was a bit of a relief rally on the back of the Greek package that was approved," said Doug Smith, chief economist for the Americas at Standard Chartered Bank in New York.
"There is some uncertainty until the implementation of it begins. That is going to be the big thing, but this probably takes some of the immediate pressure off. This is going to be a long, drawn out process," he said.
In currencies, the Brazilian real rose 0.35 percent to 1.7320 per U.S. dollar BRBY.
On Monday, Brazil's central bank called a second auction to buy U.S. dollars on the spot foreign exchange market as part of an effort to boost international reserves and limit currency market volatility. The Brazilian government has stepped up its intervention recently as the real has firmed against the dollar.
The Mexican peso rose 0.48 percent to 12.2561 per greenback MEX01MXN=.
"The news from Europe is calming," said Omar Martin del Campo, a trader at Banco Ve por Mas in Mexico City. "Things are returning to the normality we saw before the data on ratings."
In addition, Mexico benefited from strong U.S. economic data, including the fastest pace of growth in nearly six years for manufacturing activity last month as well as rising consumer spending. [ID:nN03207244]
The United States buys around 80 percent of Mexican exports and the two countries closely-linked factories operate in lock step. Mexico is counting on a solid rebound in U.S. consumer demand to fuel a recovery from a deep recession last year.
Greece's bailout includes onerous austerity measures of spending cuts and tax increases totaling 30 billion euros on top of tough measures already taken. [ID:nLDE6400CL]
The package now goes before national governments for a vote where gaining approval is not expected to be a smooth process. Likewise it does not address the possibility of debt problems in other members of the euro zone.
The uncertainty meant it was not a one-way ticket to buying across the asset classes.
The MSCI Latin America stock index lost 0.88 percent on the day .MILA00000PUS. Brazil's Bovespa was the main drag on the region, dropping 0.61 percent .BVSP, while stocks in Mexico, Chile and Colombia gained ground.
The benchmark JP Morgan Emerging Markets Bond Index Plus 11EMJ.JPMEMBIPLUS showed yield spreads narrower by 4 basis points to 261 basis points over weaker U.S. Treasuries.
(Additional reporting by Luciana Lopez in Sao Paulo, and Jean Luis Arce and Michael O'Boyle in Mexico City; Editing by Andrew Hay)