The rand was on track for a third consecutive session of gains on Monday morning, while the JSE firmed amid mixed global peers, with focus on US inflation data this week.
TreasuryOne currency strategist Andre Cilliers said the rand had recovered from recent lows, supported by expectations of lower global interest rates.
Data on Friday showed the US job market remained solid, supporting economic growth without sparking inflation concerns.
The nonfarm payroll data showed the US economy added 227,000 new jobs in November, exceeding expectations. Average hourly earnings rose 0.4% from October and 4% annually, beating forecasts. However, the unemployment rate edged up to 4.2%, and labour force participation slipped to 62.5%.
According to data from CME Group, while traders are betting on an 87% probability the Federal Reserve will ease its main rate by 25 basis points (bps) at the December 17-18 meeting, they’re much less certain about how many more cuts it will deliver next year.
Analysts said the solid jobs data supported a “soft landing” scenario, allowing for another potential Fed rate cut at the December meeting.
“While the economy is producing healthy job and income gains, the rising unemployment rate tempers some of the labour market’s shine, giving the Fed room to cut rates in December,” said Stephen Innes, a partner at SPI Asset Management.
At 10.07am, the rand had strengthened 0.61% to R17.894/$, 0.7% R18.8976/€ and 0.33% to R22.8338/£. The euro was little changed at $1.056.
Cilliers said a range of R17.89/$-R18.18/$ could be expected this week.
Investors will get the latest insights on inflation when the November consumer price index (CPI) data is released on Wednesday. The data is expected to show a slight rise in pricing pressures. Economists polled by Bloomberg expected a 0.3% and 2.7% monthly and yearly increase, respectively. That would be up from 0.2% and 2.6%, respectively, from the prior month.
At 10.45am, the JSE all share had gained 0.52% to 87,391.77 points, with major indices mixed, while the top 40 added 0.63%.
At the same time in Europe, the FTSE 100 gained 0.38%, France’s CAC 40 0.66% and Germany’s DAX 0.14%.
Earlier in Asia, the Shanghai Composite was little changed, while Hong Kong’s Hang Seng was up 2.83% and Japan’s Nikkei 0.18%.
In the commodities markets, gold gained 0.61% to $2,648.74/oz and platinum 1.29% to $942.3/oz. Brent crude was 1.37% firmer at $71.97 a barrel.
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