Emerging currencies advanced, led by South Korea’s won, after weaker-than-expected U.S. jobs data trimmed the odds the Federal Reserve will raise interest rates this month.
Payrolls climbed by 151,000 workers in August, below the 180,000 projected by economists in a Bloomberg survey, following a gain in July that was revised up to 275,000. A gauge of the dollar against its major peers was little changed Monday and is less than 1 percent from a one-month high reached Aug. 31.
“The interpretation of the payrolls data is a bit mixed: It has missed expectations but it’s not terrible,” said Sim Moh Siong, a currency strategist at Bank of Singapore Ltd. “Asian currencies should stay supported because the softer-than-expected payrolls should reduce the chance of a Fed rate hike in September.”
The won advanced 0.6 percent to 1,111.05 per dollar as of 11:12 a.m. in Seoul, headed for the highest level in more than two weeks on a closing basis, according to prices from local banks compiled by Bloomberg. The Malaysian ringgit gained 0.3 percent to 4.0755 versus the greenback.
The MSCI Emerging Market Currency Index advanced 0.3 percent, rising for for a second session, while MSCI’s equity index for developing nations climbed 0.8 percent.
Futures indicated that odds of a Fed rate hike in September were 32 percent as of Friday, down from 42 percent a week earlier.
The yield on South Korea’s three-year note declined two basis points to 1.31 percent, while the 10-year yield was little changed at 1.53 percent.
By: Jung Park and Y-Sing Liau (Bloomberg News).
Photo: BBC News.
Review: Emerging Market Formulations & Research Unit, FLAGSHIP RECORDS.
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