Mexico's peso led losses across Latin American on Wednesday as second-quarter GDP data missed expectations and raised fears of slowing growth, while most other currencies fell as concerns over the Delta coronavirus variant returned to fore.

The peso fell 0.6% as second-quarter economic growth came in at 1.5%, slightly below expectations of 1.7%. The Mexican economy also shrank in June from May.

The reading, coupled with a recent spike in Mexican COVID-19 cases has made the peso appear less attractive than some its high-yielding emerging market peers. A drop in Mexican inflation in the first half of August also lowered the chance of an interest rate hike by the central bank.

"Even prior to the current crisis, the country's economy had been under pressure, contracting in six of the eight quarters leading up to the pandemic," said Matthew Ryan, senior market analyst at Ebury.

"The recovery has, however, not been quite as rapid as many of Mexico's peers. We think this is partly a consequence of the government's unwillingness to increase fiscal spending."

Rebound in commodity prices, weaker dollar lift Latam currencies

Brazil's real was flat after surging nearly 3% on Tuesday, as data showed the country posted a much larger-than-expected current account deficit in July.

Consumer prices in the month to mid-August marked their highest pace of growth for the period since 2002.

A swift economic reopening in Brazil, coupled with rising commodity prices has seen inflation levels jump to multi-year highs, in turn prompting a series of sharp interest rate hikes from the central bank.

The bank has also vowed further tightening this year, boosting the outlook for the real.

Other Latam currencies also retreated, tracking broader losses in emerging markets as concerns over rising COVID-19 cases persisted from last week. The dollar was slightly lifted by safe-haven demand.

Colombia's peso eased 0.2%, while Chile's peso was flat.

Latam stocks fell in early trade, with MSCI's index of regional shares down 0.2%.