SAO PAULO: Latin American currencies weakened on Tuesday as worries about slumping oil prices and a global economic slowdown pushed investors to sell riskier assets.
The Mexican peso shed 0.4 percent against the dollar while the Brazilian real bid 0.5 percent weaker.
US crude oil dropped 3 percent, and US stock markets retreated from early gains.
Emerging market currencies have been hammered so far this year amid concerns about slower growth in China, the world's second-biggest economy, and a slump in global oil prices to a 12-year low.
Both Mexico and Brazil are major oil producers.
Stock markets around the region held onto slim gains after weak data in China stoked hopes of more economic stimulus from the government to prop up the slowing economy.
Yields paid on short-term Brazilian interest rate futures contracts in the country dropped sharply ahead of a monetary policy announcement from the country's central bank on Wednesday.
Traders bet that Brazil's central bank could raise its benchmark rate less than expected or keep it stable after the bank's president said he would take into account a "significant" cut in the country's growth outlook.
"It is strange that they release a statement like this on the first day of a (two-day) policy meeting, to say the least," said Arlindo Sa, head of interest rates trading at Icap brokerage in Sao Paulo. "I still believe that the chances of an increase are bigger but I would not be surprised if rates are left untouched."
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