The rand was flat against the dollar in early morning trade on Friday, as markets awaited US non-farms payroll data due this afternoon.
“I put the dollar/rand in a range of 6.66 to 6.72, but when the US jobs data comes out there may well be chaos,” a local rand trader said.
At 09:14 local time, the rand was bid at 6.6813 to the dollar from its previous close of 6.6781. It was bid at 9.5889 to the euro from 9.5763 before, and at 10.6520 against sterling from 10.6587 previously.
The euro was at US$1.4351 from US$1.4363.
Standard Bank analysts noted in a morning report that if US non-farm payrolls data impressed, then the rand could strengthen.
“But if the data disappoints, risk appetite is likely to wane and the rand could move back up to 6.76 rand.”
Standard Bank added that the local metal workers strike had had very little impact on the rand so far.
“However, the strike has turned violent, and industrial action is expected to spread to the SA mining sector. Therefore, domestic factors could also start to drag down rand sentiment.”
Meanwhile Dow Jones Newswires reported that the dollar edged up against its major counterparts in Asia on Friday as investors speculated that a key monthly US jobs report later in the global day would come in strong, after separate employment data on Thursday showed the labour market firming more than expected.
Dealers said that if the non-farm payrolls report for June due at 12:30 GMT underscored economic recovery, then that could boost the greenback further against the safe-haven yen even as it weighed on the US unit against more risk-sensitive currencies such as the euro.
The dollar could rise above its recent high of Y81.77, and possibly top Y82.00, if the payrolls report shows employers added more than the 125,000 jobs economists surveyed by Dow Jones expect on average, said Junichi Ishikawa, a foreign exchange analyst at IG Markets Securities.
At the same time, the boost to investors' willingness to bet on higher-yielding, riskier assets that a strong jobs report would bring means the euro could climb to $1.4450, said Tomohiro Nishida, a senior dealer at Chuo Mitsui Trust and Banking.
On the other hand, if the jobs data misses expectations, the euro could fall back, Nishida said.
“The reaction to a worse-than-expected reading could be more pronounced,” he said.
That's because many market participants are now positioned for a strong result, after data released on Thursday by payroll giant Automatic Data Processing showed private-sector jobs had risen by 157,000 in May, beating forecasts for a 95,000 gain.
Risk-sensitive Asian currencies gained after European Central Bank president Jean-Claude Trichet said on Thursday, after the central bank raised interest rates, that it would waive minimum ratings requirements to accept Portuguese debt as collateral.
Dealers said the move pushed concerns over European sovereign debt problems further to the back burner. With the threat of global financial market disruption appearing smaller, investors were growing more willing to bet on currencies that had suffered during the recent flare-up in concerns over Greece and other fiscally troubled European countries, they said. - I-Net Bridge