The South African Rand weakened against the US Dollar at the start of a macro data-packed week.
The South African currency gained more than 1.2% last Friday, as cautious remarks delivered by Federal Reserve Chair Jerome Powell dented the US Dollar.
Powell noted it was clear that the Fed’s monetary policy was slowing the economy as anticipated, with the overnight interest rate being “well into restrictive territory.”
“Having come so far so quickly, the (Federal Open Market Committee) is moving forward carefully, as the risks of under- and over-tightening are becoming more balanced,” Powell said at an event at Spelman College in Atlanta.
Despite that the Fed Chair reiterated the US central bank was prepared to deliver more policy tightening if necessary, market players seemed convinced the Fed’s rate-hiking cycle had probably ended.
Markets are now pricing in a 60% chance of a Fed rate cut as early as March 2024, the CME’s FedWatch tool showed.
This week’s investor focus will firmly be on the US Non-Farm Payrolls figures for November due out on Friday, which may impact US interest rate outlook.
Meanwhile, Rand traders will be expecting South African report on GDP growth for Q3, which will be released tomorrow. South Africa’s economy expanded at an annualized rate of 1.6% in the second quarter of 2023, while accelerating from a 0.2% growth in the prior three-month period.
As of 8:31 GMT on Monday USD/ZAR was edging up 0.49% on the day to trade at 18.7009.
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