OREANDA-NEWS. March 18, 2015. Latin American currencies mostly weakened on Tuesday, though Colombia's peso retraced some recent losses as traders positioned for the US Federal Reserve's next policy statement.

Equities markets were mixed, with the broad MSCI Latin American stock index slightly higher.

Traders remained cautious ahead of the Fed's announcement, expected on Wednesday. Signals that the bank could raise interest rates sooner than previously expected will likely drive emerging market currencies lower.

Colombia's peso ended a three-day slump, however, rising about 1 percent against the dollar. The currency is still trading near its weakest level in ten years, mostly due to a sharp decline in the price for oil, Colombia's top export.

"After hitting the 2,700 level in the morning, people are closing out positions to be more neutral and lighter on dollars ahead of the Fed," said Camilo P?rez, chief economist at Banco de Bogot?.

Brazil's real extended its recent decline, dropping as low as 3.28 per dollar, its weakest since April 2003.

Investors are cutting exposure to Brazilian assets on concerns over a recession, a credit rating downgrade and the fallout from a massive corruption scandal at state-run oil producer Petroleo Brasileiro SA, known as Petrobras.

Recently local traders have been buying dollars amid the uncertainty, even with an absence of clear market drivers.

Brazil's Bovespa stock index notched its biggest gain in a month, led by shares of iron-ore mining firm Vale SA .

Vale preferred shares gained about 4 percent after the company said it would distribute \\$1 billion to shareholders in 2015, with the first payment set for April 30.