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#RANDREPORT: RAND RECOVERS FROM US JOBS DATA TO END HIGHER
Robust jobs growth was also taken as a positive sign that the global economy.
JOHANNESBURG – The rand closed higher on Friday after quickly recovering from a dip triggered by strong US jobs data.
While the data raised expectations the Federal Reserve will start to raise interest rates in September, which could prompt investors towards US assets at the expense of emerging market assets, robust jobs growth was also taken as a positive sign that the global economy would continue to expand.
“The US jobs data was largely in line with expectations, and although the interest rates market may be starting to price in more chance of a September Fed rate hike, the FX market appears to have been doing that for some time,” said HSBC Bank's senior forex strategist, Dominic Bunning.
“This may not necessarily be a bad thing for all EM FX as it's a more positive development for global growth too.”
While the United States may start to raise rates, longer term it would tighten only gradually, he said.
South African financial markets will be closed on Monday due to a public holiday.
Just after the jobs report, the rand hit a session low of 12,7855 at 1236 GMT, before recouping losses. It was trading at 12,6425 by 1716 GMT, up 0,57 percent from Thursday's close of 12,7150.
US non-farm payrolls increased to 215,000 last month. That was below forecasts for a rise of 223,000 jobs but sent the dollar to its highest level in nearly four months, as upward revisions to the previous months and a gain in average hourly earnings were viewed positively by market participants.
South African government bonds also tracked the stronger rand, with the yield on the 2026 benchmark bond falling 4,5 basis points to 8,175 percent.
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