South Africa’s rand reached its best levels in 15-months against the US dollar on Tuesday, after data showed that the country’s unemployment rate declined in the fourth quarter of 2016.<\/p>\n
By 14h45, the rand was 1.45% firmer against the dollar, at R13.14, having touched R13.1225, its strongest level since October 23, 2015.<\/p>\n
It also firmed up against the pound and euro, 1.83% and 1.23% respectively, to R16.36, and R13.95.<\/p>\n
Reuters said that improved risk appetite helped boost the local unit.<\/p>\n
Job stats pushed outon Tuesday by StatsSA showed that employment grew by 235,000 in South Africa in the fourth quarter of 2016, while the number of job seekers declined by 92,000 resulting in slight drop in the unemployment rate by 0.6 of percentage point to 26.5%.<\/p>\n
Statistics South Africa\u2019s Quarterly Labour Force Survey\u00a0indicated that the growth in employment was mainly driven by the services industry which added 73,000 jobs, followed by transport and manufacturing which grew by 46,000, and 44,000 jobs respectively.<\/p>\n
All other industries reported employment growth\u00a0 quarter\u00a0 to quarter\u00a0 except\u00a0 Mining\u00a0 and construction which\u00a0 declined\u00a0 by\u00a0 17,000\u00a0 and 9,000 respectively.<\/p>\n
The official unemployment rate of 26.5% is still two percentage points higher compared to the same period last year.<\/p>\n
South Africa\u2019s unemployment rate for the third quarter of 2016 had climbed to 27.1% \u2013\u00a0 thirteen year high.<\/p>\n
“It’s really a technical move and a continuation of recent momentum. There’s been pressure for a while on the dollar\/rand to break lower and now it’s happened,” Jim Bryson, currency trader at Rand Merchant Bank told Reuters.<\/p>\n
“Now we need to see a close at around R12.90 to confirm the move and maybe see the rand strengthen further.”<\/p>\n
Reuters reported that technical and momentum indicators point to the rand extending the rally after struggling to break short-term resistance around R13.40 for the past two weeks.<\/p>\n