Euro zone leaders were to meet for an emergency summit on Greece's debt crisis, with failure to reach a deal making it more likely Greece will drop out of the currency bloc.
That would feed additional concerns over potential economic contagion into other parts of Europe. Investors moved out of Latin American securities and into safe-haven investments such as the U.S. dollar on Tuesday, driving down the value of currencies including the Chilean, Mexican and Colombian pesos .
Brazil's real saw the biggest move in the region, with the currency further weakened by concerns over mounting political uncertainty in Latin America's largest economy. The currency slipped as low as 3.198 per dollar before settling near the 3.190 level in the mid-afternoon.
Brazilian President Dilma Rousseff said in a newspaper interview published Tuesday that she plans to finish her term despite growing calls for her resignation on accusations that members of her ruling coalition received bribes from state contractors in recent years.
On Tuesday political risk consultancy Eurasia downgraded its short-term political trajectory rating on Brazil from "neutral" to "negative" due to the political fallout surrounding the case.
In equities markets, Brazil's Bovespa index slid for the third straight session, weighed down by shares of the most widely traded firms such as banks and commodities exporters.
Those stocks tend to track global risk appetite because they often attract a high proportion of foreign investors. All other major stock markets in the region declined as well, with the broader MSCI Latin American stock index posting its biggest one-day decline in over a week.
finance.yahoo.com
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