US Employment Report Likely To Trigger Rand/US Dollar Fluctuations

Published: 5 Apr at 12 PM Tags: Dollar, America, USA, Japan, South Africa,

The Rand is likely to experience notable movement this afternoon following the release of US non-farm payrolls and unemployment rate figures.

After the Bank of Japan’s decision to expand stimulus the market experienced violent volatility, with the US Dollar posting significant gains and the Yen plummeting against the majority of its most traded peers. In the aftermath of the BOJ’s announcement the Rand was trading at the bottom of its range.

Today however, the Rand was holding steady against the US Dollar after climbing close to a three-week high prior to the release of influential American data.

As one industry expert noted: ‘We are a bit firmer this morning in the back of weakness in the Dollar as there is some uncertainty as to whether there will be sufficient private-sector job creation to more than offset the decline in public-sector jobs.’

Recent US employment data like yesterday’s US initial jobless claims figures (which revealed an unexpected increase in first-time benefit claims) have indicated at ongoing weakness in the labour market. If today’s reports also disappoint, fears regarding the recovery of the world’s largest economy could be renewed.

Estimates in job growth have already been negatively revised by some industry experts this week. On Tuesday the ADP Research Institute cut their forecast for private employer hiring to a gain of 158,000.

Meanwhile, economists participating in a Bloomberg News Survey have forecast that employers hired a net 190,000 workers last month following February’s gain of 236,000.

Economists are also expecting the US unemployment rate to hold at 7.7 per cent, a four year low.

This afternoon’s US employment reports are likely to be the main cause of volatility in the market today.

As of Friday, 5th April 2013, the Pound Sterling currency rates mentioned within this news item were as follows:

GBP USD exchange rate was 1.5332, GBP JPY exchange rate was 149.5988, and GBP ZAR exchange rate was 13.9555.

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