MSCI's index tracking currencies in Latin America fell 1.9 percent, with Argentina's peso hitting a record low.

Investors piled into the dollar, shying away from equities as well as the euro after the ECB changed tack on its tightening plan, delaying its first post-crisis rate hike until 2020 at the earliest and offering banks a new round of cheap loans to help revive the euro-zone economy.

ECB President Mario Draghi said downside risks included geopolitical factors, the threat of protectionism and vulnerabilities in emerging markets.

"The move is certainly driven by Draghi's testimony today. It's all about the dollar today," said Christian Lawrence, senior market strategist, Latam, at Rabobank. "It will be difficult to make huge gains in EM, but don't think it is the start of a broad based sell-off in the space," he added.

The ECB's move comes after several central banks across the world held rates following the US Federal Reserve's signal in late January that it would be patient in tightening monetary policy.

The dollar's strength hit Argentina's peso the most, erasing all the gains it made so far this year.

Argentina's economy is shrinking amid one of the highest inflation rates in the world, posing an arduous challenge for President Mauricio Macri, who hopes to get re-elected in October.

The Mexican peso fell over 1 percent against the dollar, after data showed the country's annual inflation rate slowed for a second straight month to its lowest rate in more than two years in February.

Brazil's real and Chile's peso also fell, between 0.7 percent and 1.1 percent.

MSCI's index for Latin American stocks fell over 1.5 percent, led by Mexico, but a 2.5 percent rise in Argentina's stocks limited losses.

Sao Paulo-traded stocks rose for the first time in five sessions, led by banking and material stocks. Iron-ore miner Vale led gains on the index.

Colombia's peso weakened 1.2 percent, while local stocks lost 0.2 percent.