The rand started the week on a stronger footing against the dollar as the markets are still focused on the possibility of a US Federal Reserve rate cut later this year.
The rand was 0.22% stronger against the dollar at 8.08am.
At 5.30am the US dollar was trading 0.2% lower against the South African rand at R18.4178, while the euro is trading 0.2% lower at R19.8329, the British pound has declined 0.2% against the rand to trade at R23.0628, Anchor Capital said.
The dollar index steadied around 105.3 as investors braced for key US inflation data this week that could influence the outlook for Federal Reserve monetary policy, according to Trading Economics. Last week, the index ended with a small gain as Fed officials advocated for caution before lowering interest rates.
Anchor Capital said South African markets closed in the green for a sixth consecutive session on Friday, as a softer US jobs data renewed rate cut hopes. Platinum miners, Anglo American Platinum, Impala Platinum and Northam Platinum jumped 7.5%, 5.8% and 2.5%, respectively.
Food companies, RCL Foods and Tiger Brands climbed 6.1% and 2.2%, respectively. Property developers, Emira Property Fund, Attacq, Growthpoint Properties and Redefine Properties advanced 5.9%, 2.8%, 2.5% and 1.5%, respectively. Diversified miners, Pan African Resources, Kumba Iron Ore and Exxaro Resources gained 5.2%, 3.5% and 1.5%, respectively. Gold miners, Gold Fields, Sibanye Stillwater and AngloGold Ashanti rose 4.1%, 3.1% and 2.6%, respectively.
Gold
Gold prices climbed near $2 360 per ounce, trading at its highest level in three weeks, fuelled by expectations of a Fed rate cut following weak US employment figures. Last week, data showed a greater-than-expected rise in unemployment claims, signalling a slowdown in the labour market. This has led investors to expect the Fed to start easing in September, according to Trading Economics.
Traders are now preparing for April’s CPI and PPI releases due this week to gain more clarity on the Fed's monetary direction, considering concerns voiced by several Fed officials about easing.
Meanwhile, the worsening Middle East tensions continued to boost the safe-haven’s appeal. On Sunday, Israel deployed tanks into eastern Jabalia in the northern Gaza Strip following a night of intense aerial and ground bombardments, Trading Economics said.
Bianca Botes, Director at Citadel Global said that US data takes center stage this week, with CPI, retail sales and jobless claims on the cards.
Botes added that these numbers will set the tone for interest rate expectations over the upcoming weeks.
“The dollar was little moved during Asian trade on Monday, while Brent oil and gold both traded softer. We will keep an eye on Fed speak today, and US consumer inflation expectations, but otherwise it’s a light day on the calendar. The rand remains on the front foot at R18.40/$, R19.83/€ and R23.06/£,” Botes added.
BUSINESS REPORT