(Adds closing prices, details on Mexican markets) SAO PAULO, Dec 14 (Reuters) - Latin American currencies weakened on Monday, with the Mexican and Colombian pesos hitting record lows, as a drop in oil prices dampened appetite for risky assets ahead of a widely anticipated U.S. Federal Reserve meeting. The U.S. central bank is expected to raise benchmark rates for the first time in almost a decade on Wednesday, which could reduce the allure of assets in emerging markets. However, investors seemed to have prepared for the move well in advance and expected the bank to tighten policy slowly in the months that follow. "To a large extent, this move, and some modest additional tightening, is already priced into the markets," wrote Scotiabank analysts in a client note. "So much will hinge on what the Fed says in terms of market reaction." The Colombian peso hit a fresh record low as oil prices resumed their slump amid concerns of a global glut, closing down 0.9 percent at 3,350 per dollar. Also dragged down by oil, the Mexican peso dipped to another historical low on Monday at 17.465 per dollar, while the country's benchmark IPC stock index fell as much as 1.16 percent to its lowest level in nearly four months. The peso recovered some of its losses to close down 0.1 percent. Brazil's currency and stocks also slipped after demonstrations demanding President Dilma Rousseff's ouster on Sunday yielded a smaller attendance than earlier protests. The country's Bovespa stock index fell 1.1 percent while the real weakened 0.3 percent. Traders have largely applauded the opening of impeachment proceedings against left-leaning Rousseff, betting that a political reckoning could jump-start a recovery in Latin America's largest economy. Some analysts warn, however, that the optimism could be short-lived. Moody's Investors Service said last week it could downgrade the country's rating to "junk" because political uncertainty may delay the approval of fiscal austerity measures. Latin American stock indices at 2200 GMT: Stock indexes Latest Daily YTD pct pct change change MSCI Emerging Markets 771.22 -0.3 -19.35 MSCI LatAm 1,838.89 -0.95 -32.58 Brazil Bovespa 44,747.31 -1.14 -10.52 Mexico IPC 41,901.96 -0.23 -2.88 Chile IPSA 3,532.73 -0.01 -8.26 Chile IGPA 17,492.93 0 -7.30 Argentina MerVal 12,337.32 -3.45 43.81 Colombia IGBC 7,953.74 -0.19 -31.64 Venezuela IBC 14,478.96 -3.51 275.23 (Reporting by Bruno Federowski; Editing by Matthew Lewis)
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