(Adds final prices in Brazil and Mexico)
By Flavia Bohone
SAO PAULO, March 14 (Reuters) - Brazil's currency and stock market fell on Monday following weekend demonstrations calling for the ouster of President Dilma Rousseff, with traders taking profits as the focus turned to questions about the strength of the political opposition.
The Brazilian real dropped 1.71 percent to 3.6524 per dollar and the benchmark Bovespa stock index lost 1.55 percent after surging nearly 10 percent and 20 percent respectively in the prior two weeks.
The outlook for Rousseff has rapidly deteriorated.
A corruption investigation is nearing her inner circle and her largest coalition partner has distanced itself from the government, boosting expectations of a more market-friendly administration ahead.
Rousseff's woes continued on Sunday with the largest in a series of anti-government rallies sweeping Brazil's biggest cities, confirming a growing appetite for change but raising doubts about what would follow.
"Brazil continues to ride a wave of impeachment optimism, but we warn that this bullishness is likely overdone," BBH analysts said in a note to clients.
Rousseff's opponents in Congress have tried to seize on the widespread discontent to mount a reform agenda, but crowds on Sunday appeared resistant to certain opposition leaders taking the spotlight.
"We saw that people don't have a name to replace the Workers' Party government. The opposition was booed and the question remains, 'Who will replace this administration?'" said Joao Paulo de Gracia Correa, head of the regional currency desk for the SLW brokerage in Curitiba.
Shares of Brazil's state-run oil company Petroleo Brasileiro SA were among the biggest losers on the Bovespa, dropping 8.5 percent after a nearly 45 percent rally in the prior two weeks.
In Mexico, Latin America's second-biggest economy, the peso currency fell 0.25 percent against the dollar, tracking a drop in crude oil prices, while the IPC benchmark stock index declined by 0.1 percent. (Reporting by Flavia Bohone; Additional reporting by Paula Laier; Writing by Brad Haynes; Editing by Dan Grebler and Alan Crosby)