SAO PAULO, May 5 (Reuters) - Latin American currencies mostly strengthened on Friday after U.S. jobs data reinforced expectations of a June rate hike, but were seen as not enough to warrant a faster pace of increases afterward. U.S. nonfarm payrolls rose by more than expected last month, but March figures were revised lower and the labor force participation dipped. Average hourly earnings rose 2.5 percent from the year before, the smallest increase since August 2016.
Traders said the figures would likely allow the Federal Reserve to hike rates next month, as previously expected. Still, the March revision and labor force participation data surprised some investors who had bet that the U.S. central bank would tighten policy at a fast pace from then on. A slower pace of rate hikes would maintain the appeal of high-yielding emerging market currencies. The Mexican peso strengthened 0.2 percent, while the Chilean peso rose 0.5 percent. The Brazilian real firmed as much as 0.5 percent before paring gains to trade nearly flat. Concerns that President Michel Temer's government could face stronger-than-expected opposition in Congress to his flagship pension reform proposal have weighed on demand for Brazilian assets in recent weeks. The country's benchmark Bovespa stock index, however, rose 1.1 percent, supported by rising shares of state-controlled oil company Petróleo Brasileiro SA in the wake of a rebound in crude futures. Shares of miner Vale SA also jumped on bargain-hunting following recent declines, sidestepping a fall in prices of iron ore.
Key Latin American stock indexes and currencies at 1630 GMT:
Stock indexes daily % YTD % Latest change change MSCI Emerging Markets 976.76 -0.34 13.66 MSCI LatAm 2612.10 0.76 10.75 Brazil Bovespa 65566.64 1.09 8.87 Mexico IPC 49326.67 0.67 8.07 Chile IPSA 4849.85 -0.07 16.82 Chile IGPA 24326.08 -0.02 17.32 Argentina MerVal 21042.01 0.26 24.38 Colombia IGBC 10297.00 0.47 1.67 Venezuela IBC 58927.10 0.64 85.86 Currencies daily % YTD % change change
Brazil real 3.1818 -0.02 2.12 Mexico peso 19.0200 0.16 9.06 Chile peso 671.7 0.45 -0.15 Colombia peso 2957.17 0.82 1.50 Peru sol 3.266 0.49 4.53 Argentina peso (interbank) 15.3450 -0.16 3.45 Argentina peso (parallel) 15.84 0.44 6.19
(Reporting by Bruno Federowski; Editing by Frances Kerry)