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Rand softens as dollar firms on higher US wages

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NewsHubThis heightens the likelihood of further interest-rate rises in the world’s largest economy this year.
At 3.42pm‚ the rand was at R13.6516 to the dollar from R13.5792‚ trading in a range of R13.56-R13.69. It was R14.4324 to the euro from R14.4026 and R16.8678 to the pound from R16.8631.
The euro was at $1‚0572 from $1‚0606.
Nonfarm jobs in the US grew by 156‚000 in December from an expected 183‚000. That brought the annual total to just below 2.2-million‚ the lowest increase since 2011.
Unemployment was marginally higher‚ at 4.7%‚ but still well below the 10% peak in October 2009.
Americans in private-sector nonfarm jobs earned an average $26 an hour in December‚ up $0.10‚ or 0.39% from the prior month.
Wages climbed 2.9% over the past year‚ the strongest growth since June 2009. This could be an indication of rising inflationary pressures in the US economy‚ which would support higher interest rates.
Bucking the recent trend of consistently moderating the timing and extent of its expected interest-rate increases‚ the US Federal Reserve had finally increased its rate forecasts‚ Momentum Investment analysts said.
“Fed forecasts now show that it could raise the Fed funds rate three times this year‚” Momentum said.
The rand surged to a four-week best level against the dollar on Thursday as the greenback fell against a basket of major currencies‚ triggered by ambiguous signals from the minutes of the federal open market committee’s December meeting. However‚ some short-covering saw the US unit come back on Friday before the release of the jobs numbers.

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