2 Min Read
SAO PAULO, Aug 21 (Reuters) - Latin American currencies resumed a sell-off on Wednesday as investors bet minutes of the U.S. Federal Reserve's latest policy meeting, due to be released at 2 p.m. (1800 GMT), will solidify expectations of a stimulus pullback next month.
The Mexican peso and the Brazilian real have tumbled for at least six of the past seven sessions on fears that the Fed is about to cut back on its bond-buying program, which for years has provided a steady source of dollars seeking higher returns in emerging markets.
The Fed's program currently injects $85 billion a month into the market, and investors and economists forecast it could be reduced by something between $10 billion and $20 billion as of next month.
* The Mexican peso led losses in Latin America, sliding 1.2 percent to 2.4160 per dollar, its weakest level in more than six weeks.
* Also weighing on the Mexican peso was local data showing retail sales were stagnant in June, one day after the government lowered its 2013 growth estimate to 1.8 percent from 3.1 percent on disappointing growth data.
* The Brazilian real dropped 0.9 percent to 2.4154 per dollar even as the central bank sold 20,000 swap contracts maturing on April 1, 2014, in a strategy to roll over expiring maturities.
* Brazil's central bank has been selling swaps in the futures market to provide investors with a hedge against a further depreciation of the real, which has already lost about 17 percent of its value since the beginning of May.