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The rand plunges to hit a record low against the dollar as the US releases glowing jobs data

by , 06 November 2015

This morning, the rand was feeling the strain of the upcoming announcement from the US Labour Department this afternoon.

After the department released the data, it sent the rand to hit an all-time low against the dollar.

Let's take a closer look at what's going on…

The rand weakened by 2.6%

The rand weakened “2.6% to 14.2689 per dollar” on the release of far better than expected US jobs data, reports Bloomberg. This is the weakest the South African currency has ever traded against the greenback.
The plunge in the rand came after the release of jobs data that “supported the case for a Federal Reserve rate increase,” adds Bloomberg. This will pull traders away from riskier assets, such as the rand.
The jobs data showed employers created 271,000 jobs last month, says BDLive. That’s much better than the forecast number of 182,000.
The US Labour Department also took the opportunity to revise higher the jobs numbers reported in August and September, adds BDLive
This is the best rate of growth for employment so far in 2015, notes Business Insider. The rate of unemployment also fell to 5%, “its lowest level since 2008”.

It looks more likely US interest rates are going to rise soon

As Christie Viljoen, the chief economist at NKC African Economics, pointed out, this data gives the Federal Reserve reason to “start lifting interest rates,” says the SABC. This isn’t good news for the rand.
At time of writing, the rand had recovered some of its earlier losses to trade at R14.17 to the rand, R15.21 to the euro and R21.30 to the pound.
So not great news for the rand. With such good jobs data, it’s looking more likely the US will hike interest rates next month.
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The rand plunges to hit a record low against the dollar as the US releases glowing jobs data
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