Rand stronger‚ awaits US payroll data

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IOL world currency1 Graphic: Renjith Krishnan.

The rand was stronger at noon on Friday on the back of some foreign money flowing into the bond market‚ while awaiting the US non-farming payroll report and the US unemployment rate.

“The rand is a little bit stronger with some profit taking on the go. Foreign investors are back buying government bonds and we are seeing a fair bit of foreign money inflows in that market. There is not much going on at the moment‚ liquidity is low‚ and we are waiting for the US payroll report later today. If the payroll figures are worse than expected the rand should strengthen‚ but if the payrolls are better than expected‚ we will see the euro weakening‚ probably taking the rand with it‚” said Warrick Butler‚ head of rand trading at Standard Bank.

At 11:58 local time the rand was trading at R8.2674 to the dollar from Thursday’s close of 8.3539‚ and at R10.1091 to the euro from its previous close of R10.1737 and at R12.8557 against sterling from R12.9598 before.

The euro was bid at US$1.2236 from $1.2177.

Rand Merchant Bank said in a note the rand was likely to remain under pressure until decisive action was taken by the world’s major central banks. The rand did however recover from its initial weakness following the ECB announcement on Thursday.

“The ECB was the second major central bank on Thursday to disappoint markets this week by announcing lots of promises but with little action. After the disappointment of the Fed’s lack of action on Wednesday‚ equity markets came under pressure and Spanish and Italian bond yields increased on Thursday in response to the ECB’s failure to provide concrete proposals to ease the region’s debt crisis‚” analysts at the bank said. - I-Net Bridge

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