Unemployment rate the cat in the bag?

The dollar has been under pressure after the payroll data were released, with the unemployment rate likely the guilty party for it. Yesterday we saw Jobless claims increased during February, while the unemployment rate rose to 3.6% for the February print. This places the FOMC betting on a resilient labour market under debate, and the focus will firmly shift to the CPI print next week.

Rand recovers, still down for the week

After opening close to the R18.10 handle, we saw the local currency weaken to a new multiple-year high when we briefly broke above R18.70. The local currency is therefore still closing the week higher than where we opened, but was given a bit of relief from the softer employment data in the US. We can expect the rand to trade within the broader range of R18.10 to R18.60, as markets continue to reassess the possibility of a 50bps hike by the FOMC in March. Current pricing has seen the market drop from a 100% probability to a 50%, complementing the fall in bond yields and the dollar itself.

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