2012.05.04 22:22:52 UPDATE: US Jobs Data Weigh Down Emerging-Market Currencies, Debt

--U.S. data miss expectations, refreshing worries over global growth --Several emerging-market currencies slid more than 1% each --Emerging-market currencies take a cue from selloff in euro and U.S. equities (Updated to add details, beginning in second paragraph.) By Erin McCarthy Of DOW JONES NEWSWIRES NEW YORK (Dow Jones)--Emerging-market currencies tumbled Friday after the U.S. April nonfarm payrolls missed expectations, topping off a week of disappointing global economic data. The Mexican peso and South African rand, whose moves typically reflect broader market moves, each fell more than 1% against the U.S. dollar Friday as markets digested the U.S. data. Most other emerging-market currencies weakened as well, though they scaled back some of these losses in late afternoon trading in New York. U.S. nonfarm payrolls rose 115,000 in April, below the 168,000 jobs increase forecast by economists surveyed by Dow Jones Newswires. The unemployment rate ticked down a tenth of percentage point to 8.1%, although that was due in part to more jobseekers giving up and dropping out of the labor force. The data renewed fears of sluggish global growth, particularly after manufacturing data out of the euro zone came in weak earlier this week. "The [nonfarm payrolls] data [were] the final straw on the risk trade," said Win Thin, global head of emerging markets strategy at Brown Brothers Harriman. "It's been harder for [emerging markets] to gain some traction," given recent data, he added. Markets also are looking warily ahead to French presidential elections and Greek national elections this weekend. As a result, the euro slid nearly 0.5% against the dollar Friday. Many emerging-market currencies took cues from the fall in the euro, U.S. equities and crude oil prices. The Mexican peso suffered the most, as Mexico's close economic ties with the U.S. make the peso vulnerable to signs of a less-robust U.S. economy. The dollar advanced 1.2% Friday to buy MXN13.1618, from MXN13.0053 late Thursday. The South African rand, which typically tracks broader markets, was recently down 0.9% against the dollar, which traded at ZAR7.8060, according to CQG. The Brazilian real was hit by both a less-optimistic global outlook and local factors. Late Thursday, Brazil's government announced plans to remove a technical barrier to lower interest rates, increasing expectations of further rate cuts in Brazil. The dollar traded at BRL1.9199, from BRL1.9081 late Thursday. Emerging European currencies broadly weakened. The Russian ruble fell sharply, in line with the decline in crude-oil prices. As Russia is the world's second-largest producer of crude oil, its currency often reflects movements in oil prices. The ruble slid more than 1% against the dollar, which bought RUB29.739 Friday. The Turkish lira, however, managed to stay in positive territory, as Turkey's central bank maintains a tight monetary policy stance. Turkey's central bank chose Friday to not hold its one-week, fixed-rate, 5.75%, repo auction in a move to curb lira liquidity and shore up the currency in the face of rising inflation. The Turkish lira edged up 0.3% against the dollar, which printed at TRY1.7585 Friday, according to CQG. Meanwhile, emerging market debt weakened too as indicated by the five-basis-point widening of the J.P. Morgan Emerging Markets Bond Index Global to 343 basis points over comparable Treasury yields. The big mover of the day was sovereign debt issued by the Dominican Republic on the news that the ruling party's Danilo Medina holds the leads in the polls ahead of presidential elections on May 20. He is expected to renew ties with the International Monetary Fund, and bring the country back under the fund's purview. -By Erin McCarthy, Dow Jones Newswires; 212-416-2712; erin.mccarthy@dowjones.com; @djfxtrader (END) Dow Jones Newswires May 04, 2012 16:22 ET (20:22 GMT)