SA rand looks to test 8.20 support

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The R70 a day minimum wage for farmworkers will be cancelled and renegotiated, Labour Minister Mildred Oliphant said.

The rand eased in early Friday trade and looked set to break through an 8.20 support level that has held it down in recent sessions while yields on government debt hit fresh record lows as more foreign money poured in in search of higher returns.

The rand was at 8.1620 against the dollar at 0648 GMT, 0.21 percent weaker than its New York close of 8.1450.

The unit has been stuck in a 8.20-8.06 band this week and needs to break through those barriers to move out of its lull.

“We continue to watch these boundaries for direction - 8.05 and 8.20 - and despite the event risk as we await the release of U.S. non-farm payrolls, our bias is to look for bottoming signals in dollar/rand,” said Absa technical strategist Judy Padayachee.

The rand ignored reserves data which showed South Africa's international liquidity position had nudged up by $311 million to $49.218 billion in June due to a higher gold price and a weaker dollar in the month.

With no other domestic data expected in this session, dealers will look abroad, especially at the U.S. non-farm payrolls numbers at 1230 GMT.

Yields on government paper hit fresh records, at 5.90 percent on the 2015 and 7.075 percent on the 2021 issue.

Treasury will look to place 800 million rand of inflation linked paper in the session. Results are out after the auction closes at 0900 GMT. -Reuters


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