By Silvio Cascione

SAO PAULO (Reuters) - Prospects of a significant shift in U.S. monetary policy will probably keep Latin American currencies weaker for months, a Reuters poll showed on Wednesday.

Analysts revised sharply their forecasts for the region's five main currencies, seeing them far from recent highs for at least the next 12 months as officials at the U.S. Federal Reserve started to discuss paring back their massive bond-buying program soon.

The smallest revisions to 12-month forecasts were to Mexico's peso, as hopes of sweeping economic reforms continue to fuel optimism in strong dollar inflows, and to Peru's sol.

But currencies such as Brazil's real and Chile's peso are expected to remain at their current levels for months even after losing over 5 percent in a matter of weeks, showed the poll, which was conducted before Brazil eliminated a key tax late on Tuesday to allow for greater capital inflows.

Brazil's currency is expected to trade at 2.10 per dollar in one year's time, according to the median estimate of 21 analysts surveyed by Reuters. That is 4.3 percent weaker than the 12-month estimate in last month's poll, and close to its current level of around 2.12 per dollar.

"Of course it is true that the widening current account deficit is helping to drive the currency lower. But that was a global trend. It wasn't limited to Brazil," said Camila Monteiro, an economist with asset management firm BNY Mellon ARX, in Rio de Janeiro.

Mexico's exchange rate, which has weakened about 7 percent in the past three weeks to around 12.70 per U.S. dollar, is seen reversing only part of those losses to 12.25 per dollar in 12 months, showed the median estimate of 17 analysts. One month ago, the Mexican currency was expected to be at 11.965 per dollar in one year's time, then its highest since 2011.

A weaker currency could help countries like Brazil regain competitiveness and boost sluggish economic growth through exports. However, it also fans inflation concerns, limiting room for an interest rate cut in Mexico, some analysts said.

The U.S. Federal Reserve is buying $85 billion in Treasuries and mortgage-backed securities each month to reduce long-term interest rates and encourage hiring. It has vowed to continue the program until there is substantial improvement in the labor market outlook.

The program, as well as other initiatives to boost market liquidity in developed economies in the past few years, sent billions of dollars to emerging economies as investors sought higher returns in riskier assets.

With the prospects of the stimulus ending, long-term interest rates started to rise in the United States, luring some of the capital back and driving down emerging market currencies worldwide. That took analysts by surprise, because at the beginning of the year, the predominant view was that Latin American governments would struggle to curb currency gains this year.

"Last month's gains in the dollar cemented the idea of a trend shift for the Chilean peso," said Martin Ferrer, head of money market trading at Capital FX, in Santiago.

Volatility in Latin American currency markets was so high in recent weeks that many analysts opted not to disclose forecasts for now as they were still revising their scenarios.


Even for currencies that are expected to perform better, such as Mexico's peso, there is less confidence compared to the past few months.

Although the government is expected move forward with plans to raise more tax revenue and open up the oil sector to foreigners, which earned the country a credit upgrade last month by Fitch and should attract long-term investments, the abrupt market reaction highlighted the potential for further sell-offs.

Bets on peso derivatives fell in the last week from near a record high of about $5.5 billion in favor of a stronger peso to about $4.8 billion, leaving a huge skew in favor of the Mexican currency that could be unwound.

A liquidation of similarly sized net long positions in 2011 and 2012 accompanied 18 percent and 11 percent losses in the peso, respectively. A 10 percent loss would take the currency to around the 14.20 level, nearing its recent multi-year lows.

(Additional reporting by Moises Avila in Santiago, Noe Torres, Alexandra Alper, Michael O'Boyle and Jean Arce in Mexico City, Nelson Bocanegra in Bogota and Ursula Scollo in Lima; Editing by Chizu Nomiyama)