Cape Town - South Africa’s rand fluctuated between gains and losses on speculation the Federal Reserve will delay paring stimulus that capped US bond yields and drove demand for higher-yielding emerging-market debt.
US employers probably added 180,000 workers in September, the most since April, a report may show today, according to a Bloomberg survey.
The data was delayed by a government shutdown that spurred economists to push out expectations for tapering of Fed stimulus.
South African inflation eased in September for the first time in three months, a report may show tomorrow.
“Not only has the political bickering raised uncertainty about the outlook for the US economy, it has also pushed back expectations of when the Fed will start with its taper program,” Theuns de Wet, head of global markets research at Rand Merchant Bank in Johannesburg, said in an e-mail.
“A significant surprise in the data will probably serve to strengthen the case for the Fed to only start its taper program next year.”
The rand gained as much as 0.2 percent and declined as much as 0.1 percent before trading less than 0.1 percent weaker at 9.8396 per dollar as of 10:07 a.m. in Johannesburg.
Yields on benchmark 10.5 percent bonds due December 2026 climbed one basis point, or 0.01 percentage point, to 7.81 percent.
The Fed will delay the first reducing bond purchases until March after the partial shutdown slowed fourth-quarter growth and interrupted the flow of data, economists in a Bloomberg survey said.
Inflation in Africa’s biggest economy probably slowed to 6 percent in September from 6.4 percent the previous month, according to the median estimate of 26 economists in a Bloomberg survey.
The report will be released tomorrow, before Finance Minister Pravin Gordhan presents his mid-term budget to lawmakers in Cape Town. - Bloomberg News