Brazil's real falls; Mexican, Peru central bank decisions on tap

Currencies of Mexico and Peru firmed ahead of central bank decisions later in the day, while Brazil's real bucked the cheer in emerging market currencies as fiscal and political concerns weighed.

Mexico's peso rose 0.1% with the benchmark interest rate expected to be hiked by 25 basis points to 4.50% as inflation remains well above policymakers' target level.

"We assume that Banxico will correct its projections for inflation to the upside," said Commerzbank foreign exchange and emerging market analyst Elisabeth Andreae. The peso may see limited support from the decision as markets may have already priced it in, she said.

Meanwhile, Mexican President Andres Manuel Lopez Obrador said on Wednesday that about $12 billion of the funds to Mexico disbursed by the International Monetary Fund could be used to pay off debt. A Bank of Mexico board member rejected the idea saying it would be against the law.

Currencies cheer slowing US inflation; Brazil's real bucks trend

Peru's sol firmed up to 0.4% before treading water, still dangerously close to all-time lows. Credit Suisse expects the bank to hold the rate unchanged at 0.25%, adding that the bank may prepare markets for a hawkish turn.

Brazil's real fell 0.5%. Sticking to his hawkish stance, central bank chief Roberto Campos Neto said all measures will be taken to tackle inflation and that markets have started to see the impact of fiscal concerns.

Electricity prices are also a concern as severe drought hits hydropower production. This could constrain medium- and long-term GDP growth to an extent, Citi Research strategists said.

Chile's peso gave up early gains made on rising copper prices. Two unions at Codelco's Andina copper mine in Chile said on Wednesday they would walk off the job in less than 24 hours after rejecting the latest contract offer from the state-owned miner.

Oil prices slip as IEA warns of slowdown in demand recovery

This comes fresh on the heels of threats of a strike at its Escondida mine. Chile is the largest producer of copper.

Latam stocks tracked a global fall in equities. Brazil's Bovespa was hit by disappointing earnings. Conglomerate Ultrapar fell on a surprise loss, while financial exchange operator B3 and meatpacker JBS dropped despite strong results. {MKTS/GLOB}

Meatpacker Minerva dropped on reports it is considering going private.

Colombian oil major Ecopetrol hit four-week highs, rising as much as 1.2% on agreeing to buy the government's 51.4% stake in conglomerate ISA for 14.2 trillion pesos.

Citi Research said the US dollar sales are likely not fully priced and expect it offer some support for the Colombian peso.