Latin American currencies weakened on Thursday after the US Federal Reserve indicated it would raise interest rates more times than expected next year, potentially draining capital away from emerging markets. The central bank unanimously lifted its benchmark rate on Wednesday as widely expected but surprised investors by increasing the number of hikes anticipated for 2017 to three from two.
The Brazilian real weakened as much as 2 percent on Thursday, more than its Latin American peers. The nation's currency markets were closed at the time of the Fed announcement. Brazil's benchmark Bovespa stock, which fell 1.8 percent after the Fed decision, extended losses on Thursday.