Most Latin American currencies gained on Wednesday, with Brazil's real jumping to a two-month high on improving economic prospects, while investors awaited an interest rate decision from the Federal Reserve.

MSCI's index of Latin American currencies and stocks gained 0.3% each, as markets bet the Federal Reserve would not hike rates and continue to support the economy following a run of positive economic data.

The real rose 1.22% to its highest point since late- February after consumer confidence marked its biggest rise in nine months in April, as households looked through the second wave of the pandemic to a brighter economic landscape in the coming months.

"The imminent passing of the budget for 2021, officially respecting the spending cap and the affirmation efforts that the tax and administrative reforms would be stepped up, supported BRL-positive sentiment," said Melanie Fischinger, an emerging markets analyst at Commerzbank.

However, flailing public finances and a damaging second wave of COVID-19 infections weighed on the real's outlook.

"Until investors are convinced that a consolidation of the national finances and the implementation of the planned reforms will take priority, BRL will continue to struggle with appreciation," added Fischinger.

Currencies of oil exporting countries, Mexico and Colombia gained 0.3% and 0.4% respectively, tracking higher oil prices amid expectations of rising fuel demand.

Gains were limited in the Mexican peso as a Reuters poll showed the Mexican economy likely grew only marginally during the first quarter of the year due to the impact of the coronavirus pandemic and energy shortages in February.

Economic activity took a hit in February when a spell of unusually cold weather in the United States, especially Texas, led to gas shortages in Mexico that forced temporary shutdowns of Mexican factories.

Chile's peso was subdued as copper prices eased from 10-year highs, but analysts at Goldman Sachs joined others predicting a copper rally to record levels.

Chilean President Sebastian Pinera on Tuesday abandoned his challenge to an opposition-led bill allowing citizens to draw down a third tranche of their pensions, saying he would sign it into law, further supporting the currency.

So far, Chileans have withdrawn two 10% tranches of their pensions, totaling $37.5 billion in savings.

Meanwhile, US President Joe Biden is set to address the Congress later in the day, and is likely to underscore his administration's plans for mass infrastructure and stimulus spending.