EMERGING MARKETS-Most Latam currencies steady after US jobs data, set to clock weekly gains

By Shashwat Chauhan

March 7 (Reuters) - Most Latin American currencies were flat on Friday, as investors assessed a U.S. job report which hinted that the Federal Reserve remained on track to cut interest rates this year, capping off a choppy week marked by confusion over U.S. trade policy.

U.S. job growth picked up in February, with nonfarm payrolls increasing by 151,000 jobs, while the unemployment rate edged up to 4.1%. Currency markets were choppy after the release of the data.

"The solid February jobs report shows that the economy remains healthy, but fears of what could come next are likely to overshadow the positive news from today's release," said Josh Jamner, senior investment analyst at ClearBridge Investments.

The dollar index =USD was last down 0.5% while trader bets indicated the Fed may wait until June before restarting rate cuts and expected at least three cuts by December.

"Investors are likely to temper their reactions to this morning's data due to the perception of it being 'already stale' given the rapid policy shifts coming from DC."

Focus will now be on Fed Chair Jerome Powell's comments later in the day.

Amidst the tariff-related volatility, most Latin American currencies were on pace for weekly gains against a dropping dollar.

On Thursday, U.S. President Donald Trump suspended tariffs of 25% he had imposed this week on most goods from Canada and Mexico, the latest twist in a fluctuating trade policy.

Mexican officials will meet with U.S. trade officials next week to discuss the United States' tariffs on aluminum and steel imports, Mexican Economy Minister Marcelo Ebrard said.

Investors in the Mexican currency were also parsing data which showed Mexico's annual inflation met market expectations and remained within the central bank's target range, likely leaving the door open for policymakers to keep lowering interest rates.

The peso MXN= held firm at 20.3 per dollar.

In Brazil, the economy grew 3.4% in 2024, the strongest since the post-pandemic rebound, but momentum slowed more than expected in the fourth quarter, fueling bets of an earlier end to the rate hike cycle.

The real BRL= was last down 0.1% versus the dollar at the end of a week where local markets were shut for the first half of the week.

Chile's peso CLP= edged 0.1% up after data showed consumer prices rose 0.4% in February from the previous month, matching market expectations ahead of a central bank interest rate decision later in March.

MSCI's index for Latin American currencies .MILA00000CUS dipped 0.2%, while stocks .MILA00000PUS advanced 0.3%.

Brazil's Bovespa .BVSP ticked 0.5% higher, buoyed by energy stocks. The Argentine bourse .MERV jumped 0.9%.

EM debt stabilized after being swept up in a global selloff earlier this week, with international bonds of Ukraine, Egypt, Ghana and Senegal - to name a few - all steadying.

JPMorgan meanwhile, lowered its view on emerging markets sovereign debt in dollars, moving its recommendation on sovereign and semi-sovereign dollar debt included in its EMBI Global Diversified index to "underweight" from "market weight."

South Africa's rand ZAR= weakened 0.7% against the dollar after Trump said the United States is stopping all federal funding to South Africa.

HIGHLIGHTS

Colombia considering new spending delay, amount pending, Finance Minister says

Recession risks rise for all three North American economies over US tariff chaos - Reuters poll

Argentina's YPF says 2024 adjusted EBIDTA up 15% to $4.65 billion

Key Latin American stock indexes and currencies: