SAO PAULO: Latin American currencies mostly weakened on Wednesday on the back of lower commodity prices, with the Mexican peso nearing levels which triggered central bank intervention earlier this year.
The peso fell as low as 18.6225 per US dollar, the weakest since Feb. 17, when the central bank sold dollars directly to banks and unexpectedly raised its benchmark interest rate to fight off currency speculators.
Wednesday's move came as prices of crude, a key export and source of revenue, fell below $49 per barrel on skepticism that major producers could agree to curb output.
Prices of oil later pared losses after OPEC sources told Reuters the group was likely to consider a new output ceiling at a meeting on Thursday.
Oil-rich Colombia's peso weakened more than its peers for a second day, after the central bank said on Friday it would suspend dollar option sales aimed at cushioning the currency's decline.
The Brazilian real seesawed as traders remained skeptical of the country's economic outlook even after a smaller-than-expected economic contraction in the first quarter.
Analysts pointed out the figures were propped up by an increase in government spending, which should fade over the following quarters.
"With fiscal policy set to tighten over the second half of the year, this prop to the economy will go," Capital Economics analyst Neil Shearing wrote in a report.
Interim President Michel Temer's government will seek constitutional change to curb increases in public spending as part of a series of measures meant to regain investor trust.
The country's benchmark Bovespa stock index inched up, supported by a rebound in shares of Bradesco SA.
The stock fell 5 percent the day before after federal police accused the bank's chief executive officer Luiz Carlos Trabuco and two senior executives of plotting to avoid a 3 billion-reais ($832 million) tax fine.
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