US dollar falls 0.5% to 3.436 soles on weak US jobs data

The US dollar closed at 3.436 Peruvian soles on October 2, falling 0.5% from 3.453 soles in the previous session. The decline followed a US jobs report showing significantly weaker employment growth than forecast, reducing expectations of a Federal Reserve interest rate increase in October.

US nonfarm payrolls rose by 29,000 in September against 90,000 expected, while the unemployment rate rose to 4.2%. The probability of an October Federal Reserve rate hike dropped to 21% from 26% prior to the release, according to Jorge Luis Huayta, FX trader at Kambista. In US macroeconomic data, the manufacturing PMI rose to 55.9 points in September from 53.9, missing expectations of 57.0.

The US Dollar Index fell 0.09%, while the 10-year US Treasury yield reached 5.34%, its highest level since 2002. Across regional currencies, the Colombian peso gained 1.35%, the Mexican peso rose 0.50%, and the Brazilian real added 0.10%, while the Chilean peso fell 0.49%. In commodities, WTI crude oil declined 1.06%, gold fell 0.94%, silver dropped 1.07%, copper lost 0.22%, and zinc decreased 1.40%.

In the local market, the exchange rate moved from 3.453 to 3.434 soles, marking a sol appreciation of 1.9 centimos. The pair fluctuated between 3.430 and 3.442 soles during the session after opening around 3.440 soles. The Central Reserve Bank of Peru let a foreign-exchange purchase swap of 400 million soles mature. Total spot volume reached 597.5 million dollars, which Jimena Torres, foreign exchange intermediation manager at Renta4 SAB, noted was 19% higher than the previous day's 499 million dollars.

Markets are focusing on the upcoming Central Reserve Bank of Peru policy decision scheduled for Thursday, where analysts expect the benchmark interest rate to remain at 4.25%.