SAO PAULO: Latin American currencies weakened on Wednesday as speculation US President Donald Trump could face the threat of impeachment triggered worldwide profit-taking on riskier assets.
The Brazilian real slipped 0.4 percent, while the Mexican peso fell as much as 0.7 percent before paring gains to trade nearly flat. Both currencies had strengthened in the last six trading days.
News reports emerged on Tuesday that Trump had asked then-Federal Bureau of Investigation Director James Comey to end the agency's investigation into ties between former White House national security adviser Michael Flynn and Russia.
The reports fueled questions over whether Trump could be charged with obstruction of justice, potentially opening the doors for an early exit from office.
Uncertainty over his future drove investors away from higher-risk assets, while also fostering doubt over the implementation of his fiscal expansion pledges, traders said.
Stock markets also fell, with MSCI's emerging markets equity index down 0.6 percent. MSCI's Latin American stock index underperformed following a 6 percent rally in the last six sessions.
All of Latin American benchmark stock indexes were down, with Mexico's IPC the worst performer.
Shares of bottler and retailer Fomento Economico Mexicano (Femsa) subtracted the most points from the index after Coca-Cola Femsa, a joint venture with Coca-Cola Co, ditched plans to acquire certain territories in the United States.
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