Latin American currencies weakened on Friday after upbeat data on US services and manufacturing overshadowed tepid wage growth. US services activity rose at the fastest pace since August 2005 in October, according to the ISM report on the nation's non-manufacturing sector, easily outpacing analysts' expectations.
Along with data showing rising factory orders, the report fuelled hopes of increasing strength in the US economy that could drive the Federal Reserve to raise interest rates at a faster-than-expected pace in coming months.
Higher US rates would likely dampen demand for emerging market currencies, which offer higher yields. Still, some traders remained concerned over the US labour market's strength after a series of mixed reports.
Earlier on Friday, data showed a sharp retreat in annual US wage gains and a surge in the number of people dropping out of the work force in October, casting a doubt over the labour market. Currencies from Brazil, Mexico, Chile and Colombia weakened between 1 percent and 1.6 percent.
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