EM Currencies Extend Winning Streak to 10 Weeks Amid Strong US Jobs Report

Emerging-market currencies have recorded their longest winning streak since 2007, extending it to ten consecutive weeks. The MSCI Emerging Markets Currency Index rose despite a stronger-than-expected US jobs report, which briefly triggered dollar buying.

Currencies such as the South African rand and Mexican peso quickly recovered their losses, maintaining the upward momentum. Market attention has shifted to next week's US inflation data, with many expecting it to determine whether the Federal Reserve proceeds with a rate hike at its upcoming meeting.

The US Labor Department reported that nonfarm payrolls increased by 162,000 in August, far exceeding the consensus estimate of 56,000. The unemployment rate held steady at 4.1%, while average hourly earnings rose 3.1% year-over-year, slowing from 3.2% in July.

Some analysts interpreted the deceleration in wage growth as evidence of easing inflationary pressure. However, others caution that inflationary pressures remain entrenched and market expectations for Fed rate hikes will remain elevated overall.