The dollar weakened and developing-nation currencies rose after US jobs data damped speculation that the Federal Reserve will raise interest rates this month.
The greenback fell against most of its major peers, with South Africa’s rand and Asian currencies among the biggest beneficiaries. The MSCI Emerging Markets Index capped its biggest two-day advance in almost a month, while European stocks hovered at a four-month high. The pound climbed after a gauge of UK services jumped the most on record, and the yen retreated, Bloomberg reported.
Friday’s US payrolls data showed hiring moderated more than economists forecast in August, while the number of jobs added in July was revised higher. Odds on the Fed raising rates at its meeting this month were pared after the report, to 32% from 36% a week earlier.
As the US central bank ponders when to tighten monetary policy, officials elsewhere are still grappling with lackluster price growth, with the European Central Bank due to review rates this week, along with Australia, Canada, Poland and Sweden.
Currencies
The Bloomberg Dollar Spot Index, a gauge of the greenback against 10 major peers, fell 0.2% in New York. The measure slid as much as 0.5% on Friday following the release of the payrolls data, before erasing its decline as investors weighed the significance of the revised July figures.
New Zealand’s dollar, which offers the highest yield among Group of 10 currencies, strengthened 0.3%, while the rand rose 0.7%, touching its highest level this month. South Korea’s won led gains in emerging markets with a 1.1% advance. Brazil’s real slumped 0.8% on concern newly installed President Michel Temer will struggle to win support for measures aimed at boosting growth and shoring up the budget.
Sterling reached its strongest level in almost two months versus the dollar, rising as much as 0.6% to $1.337.
Stocks
MSCI’s emerging markets gauge added 1.1%, after climbing 1%, while Brazil’s Ibovespa index slipped 0.1%, remaining near its highest level in two years.
S&P 500 Index futures were little change at 2,178.75, while contracts on Japan’s Nikkei 225 Stock Average slipped 0.6% to 16,895 in Chicago. Futures on other Asian indexes mostly signaled declines for Tuesday, with those on Australia’s S&P/ASX 200 Index down 0.4%.
The Hang Seng China Enterprises Index of mainland companies listed in Hong Kong climbed 1.5% to the highest level this year. Futures on the measure rose 0.1% in most recent trading.
Tencent Holdings Ltd., the Chinese online gaming company and owner of the instant messaging application WeChat, jumped 4.2%, boosting its market value to $HK1.99 billion ($256.6 billion) to surpass China Mobile Ltd. as the nation’s most valuable corporation.
