In midday Asian trade, the South African rand is undergoing pressure, testing the R19 mark against the US dollar.
This shift is attributed to the recent strengthening of the dollar, fueled by better-than-expected US jobs data for November. The US unemployment rate decreased from 3.9 percent in October to 3.7 percent, contributing to a stronger dollar.
The resulting impact on US Treasuries has led to a rise in yields, subsequently influencing the outlook for potential interest rate cuts early next year. The trend of a strengthening dollar typically exerts pressure on emerging market currencies, including the rand.
During mid-November, the rand demonstrated strength, trading as low as 18.30 to the dollar. However, the recent developments in global markets, combined with the impact of the US economic indicators, have led to a shift in the rand’s position. Earlier in June, the rand was trading at approximately R20 to the dollar.
