August 4, 2017 / 5:37 PM / in a year

EMERGING MARKETS-Latam currencies dip on stronger-than-expected U.S. jobs data

    By Bruno Federowski
    SAO PAULO, Aug 4 (Reuters) - Latin American currencies fell
on Friday as stronger-than-expected U.S. jobs figures bolstered
the case for a third U.S. interest rate hike this year, spurring
demand for dollars.
    U.S. nonfarm payrolls increased by 209,000 jobs last month,
above analyst expectations, while June's report was revised to
show a bigger gain than previously reported. Average hourly
earnings rose 0.3 percent after gaining 0.2 percent in June.

    The positive numbers followed mixed U.S. economic figures
that had cast doubt over the likelihood the Federal Reserve
would raise rates once more this year and three times next year.
Higher U.S. rates could drain capital from emerging markets,
weighing on the value of their currencies.
    The job and average hourly earnings numbers could clear the
way for the Fed to announce a plan to start shrinking its $4.5
trillion bond portfolio in September, a key step in its plan to
unravel monetary stimulus.
    Still, some traders refrained from making big bets on U.S.
monetary policy in the lack of clear signs of accelerating
    "Despite the jobs growth, the fall in the unemployment and
underemployment rates, wage pressure is modest at best,"
analysts at Brown Brothers Harriman wrote in a note to clients.
    Currencies from Brazil, Mexico and Chile
 slipped between 0.1 percent and 0.3 percent. The
Colombian peso led losses as traders edged toward the
safety of the U.S. dollar ahead of a national holiday on Monday.
    Brazil's benchmark Bovespa stock index seesawed,
reacting to a heavy batch of corporate updates. Shares of
petrochemical firm Braskem SA ranked among the
biggest gainers after newspapers reported that its controlling
shareholders were considering moving to a U.S. headquarters.

    Shares of loyalty program Smiles SA rose 2.5
percent after the company reported a 18.3 percent increase in
second-quarter net profit. Meanwhile, shares of meatpacker BRF
SA fell 2 percent as traders booked profits after a
three-day stretch of gains.
    Key Latin American stock indexes and currencies at 1720 GMT:
 Stock indexes                     Latest         Daily     YTD
                                                    pct     pct
                                                 change  change
 MSCI Emerging Markets                1,066.54     0.23    23.4
 Brazil Bovespa                      66,849.37     0.11   11.00
 Mexico S&P/BVM IPC                  51,366.40     0.14   12.54
 Chile IPSA                           5,091.96     0.34   22.66
 Chile IGPA                          25,422.24     0.35   22.61
 Argentina MerVal                    21,801.68      0.1   28.87
 Colombia IGBC                       10,932.68    -0.03    7.94
 Venezuela IBC                      176,451.95    12.11  456.54
 Currencies                                     daily %   YTD %
                                                 change  change
 Brazil real                            3.1208    -0.25    4.11
 Mexico peso                           17.8705    -0.14   16.08
 Chile peso                              649.9    -0.26    3.20
 Colombia peso                         2,983.8    -1.00    0.59
 Peru sol                                3.243    -0.12    5.27
 Argentina peso (interbank)            17.6800    -0.06  -10.21
 Argentina peso (parallel)               18.11     0.39   -7.12

 (Reporting by Bruno Federowski; Editing by Tom Brown)
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