Rising oil prices lifted crude exporter Colombia's peso to a five-week high on Wednesday, while Brazil's real extended gains to a sixth session and stocks hit record highs on economic growth prospects.
The real was up 0.4% and the Bovespa stock index also extended gains to a sixth straight session and hit an all-time high of 128,620.25.
The real had rallied 1.3% on Tuesday when data evidencing faster than expected growth in the first quarter saw Goldman Sachs, BNP Paribas and Citi raise their 2021 growth forecasts above 5%.
But the drought in Brazil is affecting inflation as it affects food prices, central bank head Roberto Campos Neto said on Wednesday, adding that climate change has been influencing central bank mandates and monetary policy.
Meanwhile, industrial production in Brazil fell in April for a third consecutive month, figures showed, a surprise drop showing a deeper than expected impact of the COVID-19 pandemic.
"(The fall in industrial production is) likely to be followed by a partial recovery last month," said William Jackson, chief EM economist at Capital Economics.
"That said, the latest surveys suggest that activity in the industrial sector hasn't picked up to the same extent as other parts of the economy," Jackson added.
Colombia's peso rose 1% as oil rose, supported by an OPEC+ decision to stick to its plan to restore supply to the market gradually and by the slow pace of nuclear talks between Iran and the United States.
In the world's second-largest copper producer Peru, socialist presidential candidate Pedro Castillo is taking aim at copper mining firms' coveted tax stability agreements that freeze tariffs, accusing mining firms of plundering Peru's wealth.
Mexico's peso rose 0.3%. Mexican President Andres Manuel Lopez Obrador's leftist National Regeneration Movement (MORENA) and its allies should comfortably defend their majority in the lower house of Congress in mid-term elections on June 6, an opinion poll showed on Wednesday.
A super majority by the ruling party would make it easier for it to pass less market-friendly reforms.
Among shares, beef producer Marfrig Global Foods jumped 4.6% a day after it asked antitrust watchdog CADE to approve its purchase of almost a quarter of Brazil's biggest poultry processor BRF's stock.
Mexico's Ipc index stayed at highs last seen in January 2018, while Colombia's COLCAP rose half a percent.
Elsewhere, South Africa's rand erased session losses to hit a more than two-year high, while Russia's rouble was set to post its best session in three weeks, bolstered by the deputy economy minister's comments that the Russian economy will recover to pre-pandemic levels in the next few weeks, earlier than thought.