SAO PAULO, March 19 (Reuters) - Latin American currencies seesawed 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. More importantly, traders will be closely eyeing 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 0.3 and 0.4 percent, while the Colombian peso was flat. Brazilian stocks, however, fell 0.9 percent, as volatility spiked due to the expiration of several option contracts. Shares of miners and steelmakers, such as Vale SA and Usinas Siderúrgicas de Minas Gerais SA, tracked iron ore prices lower. Vale's share subtracted the most points from the benchmark index. 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 1520 GMT:
Stock indexes daily % YTD % Latest change change MSCI Emerging Markets 1204.73 -0.69 4.72 MSCI LatAm 3016.51 -0.66 7.37 Brazil Bovespa 84117.98 -0.91 10.10 Mexico IPC 47477.58 -0.71 -3.80 Chile IPSA 5577.43 -0.34 0.23 Chile IGPA 27952.47 -0.29 -0.10 Argentina MerVal 32026.61 -1.62 6.52 Colombia IGBC 11500.89 0.9 1.15 Currencies daily % YTD % change change
Brazil real 3.2911 -0.40 0.67 Mexico peso 18.7510 -0.28 5.06 Chile peso 608.8 -0.13 0.96 Colombia peso 2854.5 0.04 4.47 Peru sol 3.272 0.00 -1.07 Argentina peso (interbank) 20.2550 -0.32 -8.17 Argentina peso (parallel) 20.86 0.14 -7.81
(Reporting by Bruno Federowski Editing by Alistair Bell)