Lozano enjoyed three productive years at his first professional club, Pachuca, before continuing to impress at PSV this season.
The 22-year-old, who has become a regular for Mexico’s national side, scored nine goals in his first eight games for PSV and has been watched by a number of clubs.
Arsene Wenger is said to be an admirer of Lozano, viewing him as a potential replacement for Alexis Sanchez, but Liverpool are now determined to beat their Premier League rivals to his signature.
The Daily Star say Jurgen Klopp has expressed interest in securing a deal, which could spark a bidding war for the £42million-rated winger.
Liverpool are exploring their options amid ongoing uncertainly over the future of Philippe Coutinho, who handed in a transfer request last summer in a bid to land a dream move to Barcelona.
While he stayed at Anfield, Barca remain interested in the Brazilian and are reportedly ready to revive their interest during the January transfer window.
Arsenal, meanwhile, are becoming increasingly resigned to Sanchez leaving – Manchester City are keen to secure a deal for the player who was close to joining the Etihad club last summer.
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