The rand firmed to its best level in almost two months on Monday, 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 jobs market remained solid in November, with the economy adding new jobs and exceeding expectations. Average hourly earnings also rose, beating forecasts. However, the unemployment rate edged up, and labour force participation slipped.
Analysts say the solid jobs data supports a “soft landing” scenario, allowing for another potential Federal Reserve rate cut.
Traders are betting on a rate cut at the December meeting, but are less certain about future cuts.
According to Stephen Innes, a partner at SPI Asset Management, the economy’s healthy job and income gains are tempered by the rising unemployment rate, giving the Fed room to cut rates.
At 6pm, the rand had strengthened 1.4% to R17.752/$ — its biggest one-day gain in more than two months. It had firmed 1.21% to R18.8008/€ and 0.85% to R22.7135/£. The euro was 0.22% firmer at $1.0591.
Investors will get the latest insights on US 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.
“Globally, markets await US inflation data, due this Wednesday, to assess the Fed’s next move, after a solid November jobs report,” said Citadel Global director Bianca Botes.
The JSE all share gained 0.81% to 87,642 points and the top 40 0.87%. Resources rose 3.51%, precious metals 3.44%, industrial metals 3.18%, SA listed property 0.99%, food producers 0.73%, banks 0.45%, financials 0.29% and industrials 0.11%. Retailers lost 0.43%.
At 6.10pm, the Dow Jones industrial average was 0.22% weaker at 44,542 points. In Europe, the FTSE 100 gained 0.53% and France’s CAC 40 0.88%, while Germany’s DAX was little changed.
In the commodities markets, gold gained 1.38% to $2,668.99/oz and platinum 1.96% to $948.5/oz. Brent crude was 1.96% firmer at $72.39 a barrel.
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