Latin American currencies rise as US jobs data weakens Fed hike bets
EWZ•Most Latin American currencies strengthened after September U.S. payrolls rose by 29,000, below expectations of 90,000, lowering market bets on an October Fed rate hike to 17% from 22%. MSCI’s Latin American stock index rose 1.9%, while Brazil’s Bovespa gained 2.5%.
1. Currencies gain on jobs data
Most Latin American currencies rose against the dollar after weaker-than-expected U.S. jobs data reduced the odds of a Federal Reserve rate hike in October. September nonfarm payrolls increased by 29,000, below expectations of 90,000, and the unemployment rate rose to 4.2% from 4.1% in August. Fed hike bets fell to 17% from 22% before the data.
2. Regional markets advance
The MSCI Latin American currency index rose 0.2%, while its stock index gained 1.9%, on track for its largest one-day rise in a month. The Colombian peso gained 1.4%, the region’s strongest performance, and the Mexican peso rose 0.6%; Chile’s peso fell 0.4%.
3. Brazil election in focus
Investors were watching Sunday’s first round of Brazil’s presidential election. A Datafolha poll showed Luiz Inacio Lula da Silva leading Flavio Bolsonaro by 3 percentage points, within the poll’s 2-point margin of error. Brazil’s Bovespa rose 2.5%.
