USD/EM still on the defensive despite upbeat Payrolls

The greenback managed to regain some ground lost vs. the EM FX complex on Friday in the wake of the positive report from the US labour market for the month of August.

In fact, the US economy added more jobs than initially forecasted during last month (201K vs. 191K), while the unemployment rate remained unchanged at 3.9%, just below estimates at 3.8%.

However, Average Hourly Earnings rose at 0.4% inter-month and 2.9% on a year to August, recording the largest increase in the last 9 years. These data gave a fresh bout of oxygen to the buck and motivated the US Dollar Index to quickly rebound from daily lows and surpass once again the 95.00 mark.

After testing tops in the boundaries of 69.80, USD/RUB appears to have lost some upside momentum, although it still trades in levels last seen in March 2016 just below the critical 70.00 mark basically on renewed geopolitical jitters hitting RUB.

The Turkish Lira continues to recover from recent lows and manages to keep USD/TRY near weekly lows around 6.43, eroding the buck’s jump post-Payrolls and advancing more than 2% vs. the buck.

Following the recent sharp sell off, the South African Rand has now resumed the daily recovery and pushes USD/ZAR to lows near 15.08, gaining more than 1.5%.