EMERGING MARKETS-Latam FX falls as strong U.S. jobs data lifts dollar

* Mexican peso leads declines among Latam FX * Peru Congress backs motion to start impeaching Castillo * S.African rand up as Ramaphosa resignation plans denied By Shreyashi Sanyal Dec 2 (Reuters) – Latin American currencies slipped on Friday after a much stronger-than-expected reading on U.S. employment boosted the dollar, while South Africa’s rand clung to gains after rumors of President Cyril Ramaphosa resigning were rebutted. Mexico’s peso slipped 0.8%, leading declines among central and south American currencies as the dollar index jumped in line with U.S. Treasury yields. Data showed that U.S. employers added more jobs than expected in November, potentially giving the Federal Reserve more reason to hike interest rates. “This will settle into the narrative that the biggest conundrum the Fed has is that while inflation in the U.S. is coming down, the labor market remains tight. And as long as the labor market remains tight, they’re going to have to remain diligent at the job they’re doing,” said Art Hogan, chief market strategist at B. Riley in New York. The Chilean peso shed 0.3%, while Brazil’s real edged 0.1% lower. Latin American currencies were set to end their second straight week higher, while the region’s stocks index was set to snap a three-week losing streak. Optimism over a downshift in aggressive monetary policy by the U.S. Federal Reserve and that China will gradually reopen its economy have bode well for riskier emerging market assets. The Mexican government reached an agreement along with labor representatives and employers, that the country will raise its minimum wage by 20% next year, though some critics warned the move could fuel inflation. Data showed Brazil’s industrial production rose in October from September, returning to positive territory after two consecutive monthly declines though still below pre-pandemic levels. Among outliers, South Africa’s rand rose 1.2%, after falling some 4% in the last two days, hit by rumors that President Cyril Ramaphosa was going to quit over a report that found preliminary evidence he may have violated the constitution. Financial markets rebounded after the country’s ruling party denied the speculation. The Peruvian sol rose 0.3% after the its Congress approved a motion on Thursday initiated by opposition lawmakers to start impeachment proceedings against President Pedro Castillo, the third formal attempt to oust the leftist leader since he took office last year. Key Latin American stock indexes and currencies at 1420 GMT: Stock indexes Latest Daily % change MSCI Emerging Markets 972.75 -0.57 MSCI LatAm 2244.16 0.35 Brazil Bovespa 111507.52 0.52 Mexico IPC 0.00 0 Chile IPSA 5237.15 -0.71 Argentina MerVal 0.00 0 Colombia COLCAP 1235.45 -0.58 Currencies Latest Daily % change Brazil real 5.1849 0.22 Mexico peso 19.2341 -0.58 Chile peso 878.7 0.05 Colombia peso 4747.88 0.25 Peru sol 3.8237 -0.19 Argentina peso (interbank) 168.0700 -0.20 Argentina peso (parallel) 308 1.62 (Reporting by Shreyashi Sanyal in Bengaluru; editing by Philippa Fletcher)