Latin American currencies rallied on Friday after disappointing US jobs data supported hopes the Federal Reserve would continue to pump dollars into the economy at the current pace, supporting investors' appetite for emerging-market assets. The Fed's bond-buying program injects $85 billion per month into the US economy but part of that money usually flows to emerging markets as investors seek higher returns.
Hopes the Fed will keep the current pace of purchases going longer increased after a report showed 162,000 non-farm jobs were created in the United States in July, less than the 184,000 expected by economists. The Brazilian real gained 0.8 percent to 2.2830 per dollar after sliding to as much as 2.3130 earlier, its weakest intraday level in more than four years.
The real was also supported by a central bank sale of 35,100 traditional currency swaps - derivative contracts that mimic an injection of dollars in the futures market. The swap auction by the Brazilian central bank was announced when the real was underperforming peer emerging market currencies. The Mexican peso rallied 1.5 percent to 12.6635 per dollar, its strongest in a week. The Chilean peso gained 0.45 percent, underperforming its Latin American peers as the price of copper, the country's main export, declined slightly in London.
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