Mexico's peso weakened on Thursday after the central bank expressed concern the inflation outlook has deteriorated, adding the currency could depreciate if talks to renegotiate the North American Free Trade Agreement are unfavorable. The minutes of the Mexican central bank's December 14 meeting reinforced a more hawkish tone under its new boss, with a majority of the four-person board saying that reaching the 3 percent inflation target will take longer than anticipated.

The Mexican peso slipped 0.24 percent. Brazil's currency was virtually flat and the Chilean peso was up 0.22 percent after data showed a widening US trade gap offset figures demonstrating a continuingly firm labour market. Traders closely track US economic data in search of clues to the pace of US interest rate increases in coming months.

Though employment has shown signs of consistent strength, mixed reports on economic activity have fuelled bets that the Federal Reserve will be slow in tightening policy, supporting demand for high-yielding emerging market currencies.

Copyright Reuters, 2017