Graphic: renjith krishnan

The rand was flat against the dollar in noon trade on Friday as the euro remained in tight ranges ahead of key US non-farm payrolls due out later today.

The single currency, however, received some good news this morning after eurozone private sector activity returned to modest growth in January, raising hopes that the downturn in Europe might not be as bad as was first thought.

The final composite purchasing managers' index for the euro area increased to 50.4 in January from 48.3 in December.

“We're just waiting for payrolls data, but when it comes to talks around Greek debt, a resolution looks less and less like a reality,” a local currency trader said.

“While eurozone private sector activity showed a positive number, we must remember that underlying fundamentals in the region are still very weak,” he added.

At 11:41 local time, the rand was trading at R7.6326 to the dollar from its previous close of R7.6371. It was trading at R10.0480 to the euro from R10.0349 before, and at R12.0851 against sterling from R12.0692 previously.

The euro was trading at US$1.3162 from its previous close of US$1.3136.

Barclays Capital said in a note that rand bulls had powered ahead on Thursday once again, as a result of an upbeat global environment.

“Not only were participants still taking heart from this week's encouraging global manufacturing data, but the fact that Fed Chairman Bernanke reiterated yesterday that US monetary policy would remain accommodative for a while longer was also supportive of risky assets and commodity prices.

“This morning's disappointing services data out of China has curbed risk appetite somewhat, but if this afternoon's US employment report impresses and/or we have some positive decision on the Greek PSI front, then we would expect risky assets to resume a bullish trend into the weekend.”

Even though the rand had recovered aggressively over a relatively short space of time, if global risk appetite accelerated further, then rand bulls could realistically look for a move down to R7.50 - if not R7.32 - in the near term against the dollar, Barclays Capital added.

Meanwhile, Dow Jones Newswires reported that in foreign exchange markets, currency majors traded in tight ranges ahead of the US jobs data while euro investors were keenly awaiting news on the Greek debt talks.

“The euro has enjoyed short stays above US$1.32 in the last week but for the most part its home has been in the US$1.3080 to US$1.3181 range,” said Tim Waterer, senior currency dealer at CMC Markets in Sydney in a note.

“The currency may be poised for a push beyond US$1.3250 if the Greece debt-deal gets penned before market patience wears thin,” he said.

A Dow Jones survey of economists' forecasts US unemployment in January to remain unchanged from the previous month at 8.5%, while forecasts for non-farm payrolls expected 125,000 jobs to have been created in January, after 200,000 new jobs the previous month.

However, US non-farm payrolls were likely to disappoint Credit Suisse said with the expectation that payrolls would rise to only 120,000 in January.

Citi was also downbeat on US non-farm payrolls, only expecting a 100,000 rise.

Once the jobs data was out, attention was expected to shift back to the on-going Greece debt write-off negotiations. - I-Net Bridge