Rand pulls back from 10.50/dollar

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NewRandMoney

Reuters.

Johannesburg - The rand steadied against the dollar early on Thursday and looked likely to trade sideways after failing to break key support the previous session and as investors wait for key US jobs data on Friday.

South Africa's currency, pulling back from 10.50 support in the previous session, was flat at 10.4200/dollar at 08:44 SA time on Thursday.

The unit has tested weaker levels since the start of the week and went all the way to 10.4950 in the previous session as investors expecting upbeat US non-farm payrolls numbers sold risky assets.

The world's biggest economy released better-than-expected jobs and housing data on Wednesday, increasing expectations of strong non-farm payrolls on Friday.

“We believe that the risk lies in an upward breach of 10.50 within the week, because we expect above-consensus US payroll growth on Friday, which would heighten Fed tapering fears even further,” Absa Capital analysts said in a note.

Dealers said the rand was likely to stay under pressure but take a breather from testing much lower levels until the data on Friday.

Benchmark South African government bonds tracked the rand weaker.

The yield on the 2026 issue was up 3.5 basis points to 8.495 percent, while that on the 2015 note climbed 3 basis points to 6.34 percent.

The South African Chamber of Commerce and Industry will release its business confidence index for November at 11:30 SA time.

The index dipped to 91.1 in October from 91.4 in September. - Reuters


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