SAO PAULO: Latin American currencies and stocks fell on Wednesday after comments by a Federal Reserve policymaker fostered bets that the minutes of the Fed's last meeting will strike a hawkish tone.
Many investors had believed the Fed would refrain from hiking rates this year as it waits for more evidence about the impact on the US economy of Britain's June 23 vote to leave the European Union.
But those expectations took a beating on Tuesday after New York Fed President William Dudley said an increase as soon as next month could be in the cards.
Higher US interest rates could drain funds away from emerging markets, which often lure foreign investors with greater yields.
"NY Fed President Dudley's comments from Tuesday have maintained a bias toward normalization and have helped provide support to the broader US dollar," Scotiabank analysts wrote in a client note.
Investors will parse the minutes from the Fed's last policy meeting, due at 2 p.m. EDT (1800 GMT), for hints on the central bank's strategy.
On the Sao Paulo stock exchange, shares of electrical utility companies mostly fell after the government suspended on Tuesday an auction to sell state-controlled Centrais El?tricas de Goi?s SA.
Potential bidders failed to present some requirements by a deadline, signaling feeble interest for the ailing power distributor.
Companhia Energ?tica de Minas Gerais, which plans asset sales, led the losses, falling more than 5 percent, outpacing the 1.2 percent decline in the benchmark Bovespa stock index.
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