US Jobs Data and Tariff Uncertainty Shake Markets, but Rand Holds Steady

In this week’s market update from TreasuryONE and ETM Analytics, Currency Strategist Andre Cilliers provides a detailed analysis of recent developments in global interest rates, US labour data, and the impact of US tariff policies on currency markets.

Last week delivered two key central bank decisions: the US Federal Reserve held interest rates steady as expected, while the South African Reserve Bank (SARB) reduced rates by 25 basis points. The SARB move aligns with local inflation trends and Governor Lesetja Kganyago’s recent comments suggesting a long-term inflation target closer to 3%. However, this drew some tension with National Treasury, which traditionally sets inflation targets.

The US decision to hold rates will be followed by a two-month break, with the next Federal Reserve meeting scheduled for September. Pressure on the Fed is mounting after disappointing US labour data released last Friday. Non-farm payrolls showed significantly lower job creation than anticipated, with June’s figures also revised downward. The unemployment rate rose to 4.2%. This has led markets to increase their expectations of interest rate cuts in the US, now forecasting two cuts before year-end.

Meanwhile, global tariff uncertainty continues to fuel volatility. With the 1 August US tariff deadline passing, a seven-day grace period was granted, extending implementation to 7 August. Despite widespread speculation, clarity on which countries received official notifications remains limited. The resulting uncertainty impacted emerging markets, with the rand briefly weakening.

However, the dollar’s trajectory reversed after the poor jobs data, boosting other major currencies and pulling the rand back below R18 to the dollar. Cilliers reaffirmed his view that the rand remains stable within its established R17.60–R18.20 trading range, supported by recent exporter activity taking advantage of brief currency spikes.

Looking ahead, continued US policy uncertainty, tariff outcomes, and labour market indicators will drive sentiment. The rand’s current range is expected to hold unless further unexpected data disrupts global markets.