Uncertainty regarding the outcome of US-China trade talks this week had investors seeking safety, keeping the greenback in demand.

Brazil's real fell 0.2 percent, declining for the seventh consecutive session. In January 2014, it fell for eight straight sessions.

Much anticipated pension reforms in Brazil have been on hold as Brazilian President Jair Bolsonaro recovers from a surgery.

You Na Park, analyst at Commerzbank said risks for the real remain elevated. "Apart from the pension reform, domestic political risks in Brazil remain high for the time being ... It remains to be seen to what extent Bolsonaro will give his economics minister (Paulo) Guedes a free hand," she said in a note.

"Additionally, inexperienced ministers dominate Bolsonaro's cabinet ... We have to wait and see how well the cooperation between the government and the highly fragmented parliament will work. If difficulties emerge, BRL could quickly come under depreciation pressure again."

The Mexican peso slipped slightly. Commerzbank's Park says the peso's weakness should be less pronounced looking ahead.

"In the course of next year, the market should have become more accustomed to the new president's style, and it should become increasingly apparent that the shift to the left will be moderate. Against the backdrop of a credible central bank and high interest rates, the peso is then expected to recover somewhat," wrote Park.

In Chile, the peso fell 0.3 percent on lower copper prices as state miner Codelco said it hoped to soon restart operations at its northern Chuquicamata mine, which suspended operations in the face of rains that were the heaviest in more than 40 years.

Meanwhile, shares in Brazil fell half a percent with most sectors in the red. Banks drove the declines with Itau Unibanco Holding and Banco Bradesco dropping more than 0.8 percent each.