But the peso could bounce back, with investors betting the U.S. Federal Reserve will offer a third round of its bond purchase program after top policymakers lamented weak economic growth in the United States.

The Mexico peso declined 0.01 percent while the real slipped 0.13 percent.

Bitter economic news in the euro zone and China pushed central banks last week to slash interest rates in a bid to jumpstart growth. European Central Bank President Mario Draghi on Mon day kept the door open to further interest rate cuts, saying any decision on further action would depend on economic data.

"The external backdrop is set to allow for a relief rally in the emerging market currencies," said Flavia Cattan-Naslausky, a strategist with Royal Bank of Scotland Securities.

China's easing inflation gives the country more room for stimulus measures.

Bouts of liquidity benefit riskier markets like Latin America, which attract yield-hungry investors.

Market players doubted a meeting of European finance ministers on Monday would lead to any swift resolutions to the euro zone crisis.

"There's still nothing concrete," said Jose Curiel, a trader at brokerage Intercam in Mexico City. "Right now investors are not very optimistic. They are afraid the crisis is going to reach the United States."

The Brazilian real was flat on minimal trading volume as a holiday in Sao Paulo state kept most traders out of the market. The real could suffer on Tuesday, however, as investors digest data showing Chinese demand fell more than expected in June.

Yields on Spain's shorter-dated paper rose sharply, signaling elevated short-term risk, as investors worried the euro zone finance minister meeting would offer no relief from the region's debt crisis.

Also weighing on the Mexican peso was data showing the country's annual inflation accelerated in June to its highest rate in 1-1/2 years, which could make policymakers reluctant to cut interest rates.

"The inflation numbers weighed slightly (on the currency), but the market is actually very calm," said a trader in Mexico City.

(Reporting by Rachel Uranga; Editing by Dan Grebler)

By Walter Brandimarte