SAO PAULO: Latin American currencies gave back some gains on Tuesday after an influential US Federal Reserve policymaker said US interest rates could rise as soon as next month.
In an interview with Fox Business Network, William Dudley, president of the Federal Reserve Bank of New York, said, "It's possible" to raise rates at the US central bank's next policy meeting on Sept. 20-21, given signs of labor market tightening.
Traders reacted by expanding bets on policy tightening this year, with a slightly better-than-even chance of a December move.
Higher US rates could draw funds away from high-yielding emerging market assets.
Most Latin American currencies had previously strengthened on weak US inflation figures and higher commodity prices.
The Mexican peso rose to a three-month high of 17.9010 per US dollar as prices of crude rose, before easing to 17.9850.
Stock markets were mixed, with Brazil's benchmark Bovespa stock index dropping 0.6 percent on profit-taking after surging past 59.000 points for the first time since 2014 on Monday.
A rise in shares of miner Vale SA limited losses in the index, however, supported by rising prices of iron ore.
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