Most Latin American currencies firmed on Thursday as the US dollar remained on the backfoot after the Federal Reserve boosted bets of an interest rate cut as early as next month.

Emerging market assets rallied, with the MSCI's index of Latin American stocks gaining 1.3% and the region's currencies index rising over 1%.

However, trading volumes were thin as markets in Brazil, which have a big impact on the indexes, and Argentina were closed for Corpus Christi day.

Boosting appetite for risky assets, the Fed on Wednesday signaled interest rate cuts this year, saying it is ready to battle growing global and domestic economic risks as it took stock of rising trade tensions and growing concerns about weak inflation.

Mexico's peso touched over a seven-week high against the dollar, while the country's main IPC stock index jumped, led by a 2.6% gain for airport operator Grupo Aeroportuario del Pacifico.

Mexico on Wednesday became the first country to ratify the United States-Mexico-Canada Agreement (USMCA) agreed late last year to replace the North American Free Trade Agreement (NAFTA) at the behest of US President Donald Trump.

However, analysts pointed to caution about reaching an agreement with the United States.

"The agreement's main hurdle is still in the US, where it is unlikely the Democrat-controlled House of Representatives will approve it this year (a 35% probability)," analysts at Eurasia Group wrote in a note.

"As the US presidential elections ramp up and the tensions between Democrats and the White House increase, it will become more difficult for the USMCA to be approved."

Chile's peso gained over 1%, tracking a gain in the price of copper, the country's top export.

Colombia's peso firmed more than 1%, while local stocks posted similar gains, with energy firm Ecopetrol SA riding on the back of higher lower oil prices.