Emerging-markets Currencies Weaken Further Against Dollar After Jobs Report

By Joseph AdinolfiMarketWatch Pulse

The dollar traded higher against its emerging-markets rivals Friday after the Labor Department's nonfarm payrolls report for August showed the unemployment rate fell to 5.1%. The Brazilian real fell to 3.79 to the dollar from 3.74 before the report. The Turkish lira fell to 2.99 to the dollar from 2.97 before the report. The South African rand fell to 13.73 to the dollar from 13.60 ahead of the report. The Mexican peso was flat at 16.83 to the dollar. The Malaysian ringgit fell to 4.26 from 4.25. The unemployment rate is now within the range of what Federal Reserve policy makers would consider "full employment," which suggests that the Fed's rate-setting committee will soon vote to raise interest rates for the first time since 2006. Higher interest rates in the U.S. would increase the return on assets denominated in dollars, making them more attractive relative to foreign assets. Emerging-markets currencies have broadly weakened against the dollar since Chinese policy makers devalued the yuan, China's currency, on Aug. 11.

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