SAO PAULO: Latin American currencies weakened on Tuesday as renewed concerns over global growth triggered profit-taking following a weeks-long rally.
Traders cited a drop in German investor sentiment as well as a downward revision in the International Monetary Fund's estimates for global growth, both prompted by Britain's decision to leave the European Union.
Worries that the US Federal Reserve could increase rates this year if financial markets remain calm also drove investors to sell emerging market assets, which often depend on higher yields to lure foreign capital.
"Markets had been too calm recently, which often leads to profit-taking," said Glauber Romano, an FX trader with Intercam brokerage in S?o Paulo.
Both the Brazilian real and the Mexican peso weakened as much as 1 percent, but pared losses. Most stock markets in the region, however, were slightly higher.
Mexico's benchmark IPC stock index rose to a new record high, supported by shares in bank Banorte and broadcaster Televisa. Traders bet that economic strength in the United States could provide a boost to Latin America's second-largest economy.
Brazil's Bovespa index rose 0.38 percent as a rally in shares of state-controlled oil company Petr?leo Brasileiro SA offset the negative tone abroad.
Expectations that Petrobras, as the company is known, will sell part or all of its fuel distribution unit BR Distribuidora SA boosted shares to their highest level in a year.
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