US jobs data offers rand a reprieve

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NewRandMoney Reuters.

Johannesburg - South Africa's rand snapped a four-day losing streak against the dollar on Friday, helped mostly by US jobs data which supported the case for loose monetary policy in the world's biggest economy.

On the local front however, vehicle sales data pointed to suppressed consumer demand, dulling prospects of the Reserve Bank hiking domestic rates further this year.

The rand hit a session low of 10.7700 to the dollar in nervous trade prior to the US jobs data, but recovered afterwards to trade at 10.6690 by 17:17 SA time, up 0.34 percent on the day.

The US numbers offset the rand-negative impact of a report showing South Africa's new vehicle sales fell 1.5 percent year-on-year in July.

Export sales of vehicles for the month fell 16.1 percent year-on-year, the trade and industry department said.

“Rand fragility is underscored by weak growth conditions and a wide cumulative trade deficit,” Tradition Analytics said, referring to a 48.27 billion rand trade deficit in the first six months of the year compared to 35.57 billion rand in 2013.

“A dollar-rand upside bias holds, with a sustained break of 10.74 targeting 10.80.”

Government bonds yields were mixed, with longer-dated 2026 debt inching up a basis point to 8.33 percent while paper at the shorter end of the curve shaved off 3 basis points to 6.69 percent. - Reuters

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