McALLEN, Texas - Forecasters say Dolly has become a hurricane and is heading toward southern Texas and northeastern Mexico.

Dolly was upgraded from a tropical storm to a Category 1 hurricane this afternoon and some strengthening is forecast before landfall Wednesday.

At 5 p.m. the centre of the storm was located about 265 kilometres east-southeast of Brownsville, Texas.

Dolly is moving toward the northwest near 16 kilometres per hour, and maximum sustained winds have increased to near 120 kilometres per hour.

A hurricane warning is in effect for the coast of Texas from Brownsville to Corpus Christi and in Mexico from Rio San Fernando northward.

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