Mexico's peso looked to break a five-session losing streak on Tuesday in thin holiday trade, while Chile's peso tracked copper prices lower.

After an extended weekend, Chile's peso lost 0.4% as copper prices fell on caution ahead of a Federal Reserve policy decision due on Wednesday.

With presidential elections scheduled for later this month, Chile's right-wing presidential candidate, José Antonio Kast, is pulling ahead in opinion polls, though he is still seen losing a likely second-round runoff against a candidate from the left.

Central bank data on Tuesday showed Chile's economic activity jumped 15.6% in September versus the same period in the previous year.

Santiago-listed stocks broke a three-session losing streak to rise 1.6%.

Mexican peso slides about 1% on worries about slowing economy

Markets in Brazil were closed for a local holiday. Stock markets in Mexico remained shut, while the peso firmed 0.4% against a steady dollar.

Investors await the Fed's policy decision, with investors expecting the US central bank to announce that is beginning the tapering of its bond-buying program. Massive stimulus from global central banks helped economies during the coronavirus pandemic, and kept flows into riskier emerging market assets.

With prices surging across the globe, central bankers face the challenge of balancing inflation containment without choking economic growth, with Brazil being a prime example.

"The global economy is losing momentum, stretching from China to the US Episodic pandemic resurgence has slowed or halted reopening efforts, parts shortages have slowed down production, and power failures and price spikes are dampening consumer and investor sentiments," said Taimur Baig, chief economist at DBS Group Research.

"At the same time, underlying demand is strong enough amid a supply crunch to push up actual and expected inflation."

Colombia's peso cut early losses to trade flat as oil futures turned positive.