Weekly market report by Andre Botha,
Senior Currency Dealer at TreasuryONE
The major event last week was the US non-farm payroll which saw the US adding 263,000 jobs in May versus the expected 185,000. While this would typically cause the Rand to weaken sharply the market focused on the softer than expected wage data. The weaker data will mean that inflation will still drag and places the newfound neutral stance of the Fed into question. We saw the Rand breaking below the R14.4000 level and ended the session at 14.3500. This puts the data in stark contrast with the Fed’s notion that inflation is steadily creeping higher and the disconnect could help EM’s push stronger against the US dollar.
Locally markets will be closed tomorrow and trade talks, Japan back in markets after a week and us having elections we could see volatile markets, especially surrounding elections and results coming in while we are still in closed markets. We would thus strongly advise that orders be placed today before closing time to take advantage of big movements in the FX market for both importers and exporters alike.
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