The rand was on track for an eighth consecutive day of gains on Monday as an improved outlook for US interest rates supported sentiment and the US dollar weakened.
Investors are increasingly betting that the Federal Reserve could be done with its hiking cycle after Friday’s non-farm payroll data showed a cooling labour market, indicating that the Fed’s attempts to cool the economy and fight inflation could be bearing fruit.
Friday’s data comes after private jobs figures that showed labour costs unexpectedly dropped in the third quarter, while private sector payrolls in October came in less than expected.
“Bets that the Fed’s rate hiking cycle is over have increased, lifting risk sentiment. US bond yields are lower, and the dollar fell sharply after the weaker payrolls and employment numbers,” said TreasuryONE currency strategist Andre Cilliers.
“The local currency is likely to remain on the front foot for now, given the growing risk appetite and the likelihood of the dollar remaining under pressure in the short term,” said Cilliers. “However, the possibility of a correction cannot be ruled out due to the pace and size of the rand’s rally.”
At 10.25am, the rand had strengthened 0.36% to R18.1871/$ and 0.19% to R19.5424/€, while it was little changed at R22.5428/£. The euro was 0.15% firmer at $1.0746.
Investors will be watching addresses by Fed chair Jerome Powell, who is scheduled to speak twice in the coming days.
Last week the US central bank kept rates unchanged for a second straight meeting.
At 10.35am, the JSE all share index had gained 0.17% to 72,977.51 points and the top 40 firmed 0.17%. The precious metals and mining index added 1.71%, resources 0.88%, industrials 0.27% and industrial metals 0.23%.
In early European trade, France’s CAC 40 and Germany’s DAX were little changed.
Earlier in Asia, the Shanghai Composite index was up 0.91%, Hong Kong’s Hang Seng 1.68% and Japan’s Nikkei 2.37%.
Gold lost 0.3% to $1,986.08/oz and platinum 0.43% to $927.50/oz. Brent crude was 1.02% firmer at $85.99 a barrel.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.