Rand Rises to Five-Month High on Weak US Jobs Data and Gold Gains

The South African rand has strengthened against the US dollar to its best level in five months due to various global and local factors.

The US jobs data released on Friday showed a surprisingly weak job market, which led markets to slash the odds of a September rate hike. The futures market now puts the chances of a rate increase at 44%, down from 67% a week earlier, according to Reuters.

This lower likelihood of higher interest rates in the US is positive for the rand as it makes yields on rand-denominated assets more attractive. Additionally, gains in gold and platinum prices have boosted South Africa's export outlook and demand for the rand.

Nedbank economists pointed out that recent gains in precious metals, including a 7% jump in gold last week, have provided support for the rand. Platinum has gained over 8% in the past month, further bolstering exports and demand for the currency.