Brazil's real fell on Monday, tracking declines in iron ore prices on concerns over Chinese demand, while broader Latin American currencies fell ahead of key inflation readings this week.
The real shed 0.7% as Chinese iron ore futures slumped more than 2% amid rising COVID-19 cases in the country.
Several iron ore miners have also halted operations in southeastern Brazil due to heavy rains that are affecting the state of Minas Gerais. A prolonged outage could dent Brazil's major iron ore exports.
Shares in Vale, CSN Mineracao SA and Mineracao Usiminas fell between 1.6% and 3.2%.
Investors are now awaiting December IPCA inflation data from Brazil on Tuesday, to see whether a mild decline in consumer prices persisted from November.
Inflation is still at more than six-year highs in the country, putting more pressure on the central bank to raise interest rates.
Compared with November, the December IPCA "is expected to have been benefited from lower monthly prints in fuels, cooking gas, and electricity tariffs", Goldman Sachs said in a note, adding that inflation for 2021 was likely to come in at 10%.
Broader Latin American currencies retreated, with MSCI's index of regional currencies down 0.1%.
Caution kicked in ahead of key US inflation data on Wednesday, which could push the Federal Reserve into raising interest rates by as soon as March.
Higher rates in the developed world tend to make risk-driven assets appear less attractive.
The rapid spread of COVID-19 on the continent has also dented sentiment in recent weeks, with countries such as Mexico marking record-high daily cases.
Mexico's peso fell 0.5%, while Peru's sol shed 0.2%.
Peru, which has one of the world's highest COVID-19 mortality rates per number of inhabitants, last week raised its pandemic alert level in various cities and tightened some restrictions.
Latin American stocks fell in early trade, with MSCI's index of regional equities down 0.5%.
Elsewhere Russia's rouble largely trimmed early gains, trading up 0.4% as the United States and Russia began tough negotiations in Geneva over Ukraine.
Colombian markets were closed for a holiday.
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