Rand slumps closer to R17/US$

JOHANNESBURG-THE rand sank ever closer to R17/US$ on Friday ahead of the release of US employment data. By lunchtime, the rand was close to R16.93/ US$ - its weakest level since end-September 2020 - after trading around R16.70 overnight.

$ strong reading on the US emplo\ment data could provide the Fed with evidence to stick to its hawkish line.

0att Simpson at Stone; Financial said there were indications the Mobs market could be showing signs of weakness.

The report ³is unlikel\ to deter the Fed from a 7 basis points hike this month. %ut when the precious nonfarm pa\roll numbers begin to crumble, so does the Fed¶s argument that the US econom\ is robust´, he said. ³$nd we¶re seeing earl\ signs of that across multiple emplo\ment metrics.´

³:hen we do see unemplo\ment begin to rise and headline emplo\ment growth lose momentum it will be hard for the Fed to ignore,´ he added.

The dollar was helped b\ two top Federal Reserve officials who said the

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econom\ could withstand sharper rate hikes and maintain growth. There has been growing talk that the fast pace of monetar\ tightening b\ the bank will tip the world¶s top econom\ into recession.

Governors

%ut &hristopher :aller, a 0ember of the %oard of *overnors, said worries were overblown and that a strong Mobs market would provide a buffer, adding that rates needed to go up sharpl\ and Tuickl\. St /ouis Fed president -ames %ullard also said there was ³a good chance of a soft landing´.

US 3resident -oe %iden is also reported to have held a meeting later Frida\ with top advisers to discuss whether or not to lift some of the Trump-era tariffs imposed on around US$ 00 billion of &hinese imports. :hile he is also said to be considering another probe into other facets of %eiMing¶s trade polic\, anal\sts said the removal of the levies could boost &hina¶s export growth to the United States b\ about 20 per cent. The move could also help ease upward pressure on US inflation, which is running at a four-decade high.

The (uro extended its losing streak, falling to US$1.0072 for the first time in 20 \ears, a da\ after minutes from the (uropean &entral %ank¶s most recent meeting indicated that, unlike the Fed, it was happ\ to hike rates at a slower pace despite surging inflation. $nd sterling continued to rise after %oris -ohnson resigned Thursda\ as leader of the ruling &onservatives, paving the wa\ for a new prime minister 30 and bringing an end to weeks of political uncertaint\ in the United .ingdom.

Analysts

The

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,f it becomes possible for current 3rime 0inister Fumio .ishida to carr\ out policies he wanted to, such as financial tax and regulations on share bu\-back, that would be negative for markets.´