(Updates with final prices, detail from Mexico) SAO PAULO, March 19 (Reuters) - Most Latin American currencies weakened slightly on Monday as traders avoided making big bets ahead of a U.S. Federal Reserve policy meeting, the first under new Chairman Jerome Powell. Investors largely expect the Fed to lift its benchmark overnight lending rate to a range of 1.5 to 1.75 percent at the end of a two-day meeting on Wednesday and also update its assessment of the economy. But traders will scrutinize the Fed's policy statement in search of clues over the pace of future rate hikes, following signs of Powell's growing confidence in the U.S. economic recovery. Higher U.S. rates could drive capital away from emerging markets, which offer high yields. "There's still much doubt over how much the Fed will tighten in coming months after the latest economic indicators," Infinity Asset chief economist Jason Vieira said. The Brazilian real and the Mexican peso weakened between 0.17 and 0.03 percent, while the Colombian peso slipped 0.05 percent. Brazilian stocks fell over 1 percent, as volatility spiked due to the expiration of several option contracts. Mexico's stock exchange was closed due to a national holiday. Shares of miners and steelmakers, such as Vale SA and Usinas Siderúrgicas de Minas Gerais SA, tracked iron ore prices lower. Still, shares of Suzano Papel e Celulose SA jumped for a second day to an all-time high after it won the battle to acquire larger rival Fibria Celulose SA.
Key Latin American stock indexes and currencies at 2305 GMT:
Stock indexes daily % YTD % Latest change change MSCI Emerging Markets 1203.59 -0.79 3.9 MSCI LatAm 3016.56 -0.66 6.66 Brazil Bovespa 83913.06 -1.15 9.83 Chile IPSA 5576.54 -0.36 0.21 Chile IGPA 27940.19 -0.33 -0.15 Argentina MerVal 31747.35 -2.48 5.59 Colombia IGBC 11500.89 0.9 1.15 Currencies daily % YTD % change change
Brazil real 3.2845 -0.17 0.88 Mexico peso 18.7055 -0.03 5.31 Chile peso 609.2 -0.20 0.89 Colombia peso 2854.14 -0.05 4.48 Peru sol 3.270 0.06 -1.01 Argentina peso (interbank) 20.19 -0.05 -7.88 Argentina peso (parallel) 20.87 -0.14 -7.86
(Reporting by Bruno Federowski Editing by Alistair Bell)