Latam currencies mostly weaken ahead of US payrolls report

06 Oct, 2016

SAO PAULO: Latin American currencies mostly weakened in early trading on Thursday as traders awaited a widely watched US employment report due on Friday for clues over when interest rates will rise.

A stretch of strong US economic data, the latest a report on Wednesday showing services activity at an 11-month high, have boosted expectations that the Federal Reserve will act soon, denting demand for higher-yielding emerging market currencies.

The Brazilian real weakened 0.5 percent and the Mexican peso slipped 0.3 percent.

The mood was somewhat less bearish in stock markets, however, as a stronger US economy could translate into demand for exports from emerging markets.

MSCI's emerging benchmark hit a one-week high, following developed bourses higher and lifted by gains across Asia , Turkey and parts of central and eastern Europe.

Brazil's benchmark Bovespa stock index rose 0.1 percent, supported by rising shares of state-controlled oil company Petr?leo Brasileiro SA and planemaker Embraer SA.

Shares in meatpacker JBS SA fell 1.4 percent as investors booked profits following a sharp increase the day before, limiting gains in the index.

Copyright Reuters, 2016

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