Aug. 26 (Reuters) - Brazilian and Mexican equities extended gains on Wednesday, while most Latin American stocks and currencies edged lower as a firmer U.S. dollar, supported by fresh inflation data, pressured regional assets.
MSCI's Latin American equities index .MILA00000PUS fell 0.1%, while its regional currency index .MILA00000CUS edged 0.2% lower.
The greenback =USD rose 0.3% against a basket of currencies after Wednesday's PCE print modestly increased expectations that the Federal Reserve could raise interest rates.
"Inflation continues to make slow progress towards target, leaving the possibility of a rate hike this year firmly in play," said James Knightley, chief international economist at ING.
"The question is how much more patience the Fed actually has."
The move marked a reversal from earlier this month, when a softer inflation reading prompted investors to pare back bets on an imminent Fed hike, sending the greenback to multi-month lows. The dollar had also come under pressure from the U.S. Treasury's bond buyback plans.
Investors are now awaiting Friday's debut speech by Federal Reserve Chair Kevin Warsh at the annual Jackson Hole gathering, though many market participants expect he will refrain from offering a clear policy outlook.
Markets also monitored prospects for the resumption of oil flows through the strategic Strait of Hormuz. Iran and Oman said they had discussed creating a "joint temporary navigational corridor" and agreed to clear mines from the waterway.
A senior Iranian source said details of the arrangement were still being worked out.
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