Latam currencies advance as weak US jobs data weighs on dollar

BRASILIA: Most Latin American currencies strengthened on Friday as a weaker-than-expected US jobs report weighed on the dollar and cooled expectations for a Federal Reserve interest-rate hike next month, while equities were mixed.

The US Labor Department’s report showed that the economy shed 23,000 jobs in July, defying expectations of 80,000 additions, according to economists polled by Reuters. As a result, the US dollar index fell 0.4 percent, hitting a seven-week low.

Money markets scaled back bets for a September Fed rate hike, with traders pricing in a 44 percent chance of an increase, down from 55 percent before the employment data, according to CME Group’s FedWatch tool.

“With not a solid belief in the Fed, terrible labor situation, and Yen intervention…it’s helping LatAm improve. The monetary policy divergence is what’s mattering right now,” said Juan Perez, director of trading at Monex.

The US payrolls surprise capped a week of central bank decisions and inflation data across Latin America, offering fresh cues on the region’s monetary policy path.

MSCI’s index tracking Latin American currencies

rose 0.2 percent, heading for a sixth straight week of gains. The equities gauge, however, slipped 0.8 percent and was poised to mark its sixth consecutive session of losses, its longest such streak since late April.

Most assets in the resource-laden region were on track to log weekly gains helped by firmer commodity prices that improved risk sentiment.

Among currencies, the Mexican peso traded 0.5 percent higher, while its stocks gained 0.6 percent, led by a 1.6 percent advance in Grupo Mexico, tracking higher copper prices.

Data showed annual inflation in Mexico slowed in July to its lowest level in more than six years, a day after the central bank kept rates unchanged and pushed back its timeline for inflation to return to target levels.

“Softer food prices, weak domestic demand, restrictive financial conditions and the lagged effects of the MXN’s appreciation earlier this year continue to support lower headline inflation,” said Andres Abadia, chief LatAm economist at Pantheon Macroeconomics.

In Chile, annual inflation also eased in July, while copper export revenue jumped 22.7 percent year-on-year. The equities benchmark

declined 0.2 percent after hitting an over three-month high in the previous session, and the peso gained 0.4 percent.

Brazilian stocks fell most among Latin American peers, down 1.9 percent, with a 3 percent loss in state-run oil firm Petrobras despite reporting strong second-quarter results, dragging the index lower. The real strengthened 0.5 percent.

Copyright Business Recorder, 2026