JOHANNESBURG: South Africa's rand steadied against the dollar early on Friday, with investors sitting on the sidelines ahead of key US non-farm payrolls data later in the session.
The rand took a hit in the previous session from weak domestic manufacturing and mining data that pointed to slow economic growth in the third quarter.
Losses extended to a two-month low, with strong US economic growth data adding to expectations of the Federal Reserve tapering its stimulus programme.
A surprise European Central Bank interest rate cut provided some respite, and early on Friday, as the market braced for jobs numbers out of the United States, investors put off buying dollars, allowing the rand to recover some losses against the US currency.
At 0631 GMT, the rand was slightly firmer at 10.2800 to the dollar, compared with a 10.2925 close in New York on Thursday.
"The topside move on dollar/rand is becoming overdone in a scenario where the Fed remains ultra-accommodative, but at the same time one needs to tread cautiously until US payrolls risk has passed today," Tradition Analytics said in a note.
US jobs numbers are due at 1330 GMT. Yields on government bonds were down one basis point to 8.07 percent on the 2026 issue and 6.005 percent on the 2015 note.
Treasury will sell inflation-linked paper at 0900 GMT, where yields are expected to be above market levels.
Results will be on page. A sale of Treasury Bills will follow at 1000 GMT.
Comments
Comments are closed for this article.