By Bruno Federowski
SAO PAULO, Jan 30 (Reuters) - Latin American currencies mostly weakened on Tuesday ahead of a Federal Reserve policy meeting this week that could bolster expectations of higher U.S. interest rates going forward.
The Fed will publish its policy statement on Wednesday following a two-day meeting. Some economists expect it to raise its economic assessment, which would strengthen expectations ofthe U.S. central bank raising interest rates four times this year.
Higher U.S. rates could weigh on demand for emerging market assets, which typically offer higher yields.
Traders also avoided risky assets ahead of U.S. President Donald Trump's first State of the Union address later on Tuesday.
"Trade, immigration, and infrastructure are the most highly anticipated areas of focus. Foreign policy will also be closely scrutinized as market participants look to comments on North Korea, Iran, and potentially Russia," analysts at Scotiabank wrote in a client note.
Currencies from Brazil , Mexico , Chile and Colombia weakened between 0.3 and 0.6 percent.
Stocks also fell in the region in the wake of risk-aversion, with MSCI's Latin American index down 1.3 percent.
Blue-chips led the decline, with Brazilian lender Ita?? Unibanco Holding SA subtracting the most points from the benchmark Bovespa stock index .
Shares of wood pulpmaker Fibria Celulose SA , however, rose 2 percent after its operating profit nearly tripled in the third quarter from the year before. Fibria executives on Tuesday denied that the company or its shareholders were discussing a potential tie-up with rival Eldorado Brasil Celulose SA, but underscored theirinterest in eventual deals in the sector. Key Latin American stock indexes and currencies at 1610 GMT:Stock indexesdaily %YTD %
change change
LatestMSCI Emerging Markets 1247.65 -1.6 9.45MSCI LatAm 3155.59-1.2913.04Brazil Bovespa 83985.53-0.84 9.93Mexico IPC 50219.69-0.82 1.75Chile IPSA 5837.31-0.73 4.90Chile IGPA 29323.84-0.66 4.80Argentina MerVal 33904.77-2.5412.77Colombia IGBC 12260.74-1.03 7.83
Currencies daily %YTD %
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Latest Brazil real 3.1838-0.59 4.07Mexico peso 18.6775-0.28 5.47Chile peso 605.8-0.42 1.46Colombia peso 2846.19-0.36 4.77Peru sol 3.216-0.03 0.65Argentina peso (interbank)19.5950-0.03-5.08 Argentina peso (parallel) 19.98 0.25-3.75 (Reporting by Bruno Federowski Editing by Chizu Nomiyama)
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