USD/ZAR hovers above 14-week low, extending last week’s loss

The South African Rand gained against a softer US Dollar on Monday, while extending a 3.05% advance last week, after recent macro data added to expectations that the Federal Reserve had probably ended its policy tightening cycle.

Data showed on Friday that the US economy had added only 150,000 job positions in October – almost two times fewer compared to September’s revised down figure of 297,000.

The figures suggested the US labor market was slowly cooling, since several strikes, including from members of the UAW, pressured the manufacturing payrolls.

The Rand gained almost 0.9% on Friday as longer-term US Treasury yields pulled back from October’s multi-year highs.

“More evidence that the U.S. will experience a soft landing has created a perfect environment for the rand, with the USD weaker,” Rand Merchant Bank analysts wrote in an investor note, cited by Reuters.

The analysts also noted that Fed rate cuts could occur as early as May.

As of 10:27 GMT on Monday USD/ZAR was edging down 0.27% on the day to trade at 18.2045. Earlier in the session, the exotic Forex pair went down as low as 18.1562. The latter has been the pair’s weakest level since August 1st (17.7866).