EMERGING MARKETS-Currencies shed gains as investors digest U.S. jobs data
By Asher Levine and Sujata Rao
SAO PAULO/LONDON Feb 7 (Reuters) - Emerging market currencies pared gains on Friday as traders reconsidered the impact of January's U.S. payroll numbers on the Federal Reserve's plans to reduce its monetary stimulus program.
U.S. employers hired far fewer workers than expected in January and job gains for the prior month were barely revised up, data showed on Friday.
Traders initially saw the data as evidence that growth in the world's largest economy is losing steam, driving emerging market currencies higher on a bet that the Fed would be less likely to further trim its bond-buying program.
But a closer look at the figures led many to shift course.
"After we looked deeper into the numbers we found the positive details overshadowed the negative headline," said Michael Woolfolk, a senior currency strategist at BNY Mellon in New York, citing data showing strong employment gains in the household survey from which the jobless rate is derived.
"If the US economy has indeed slowed this winter, it is first of all modest," he said.
Brazil's real closed nearly unchanged from Thursday after having reached its strongest level in over two weeks earlier in the session. The Mexican and Chilean pesos were also unable to hold onto gains.
The Turkish lira reversed gains against the dollar late in the session. Standard & Poor's downgraded Turkey's credit rating outlook to "negative" from "stable" on Friday, citing risks of a hard economic landing. Continuación...