Johannesburg - South Africa's rand weakened in early trade on Thursday as investors awaited for the all-important, ever volatile payrolls data on Friday which will give indications of the next Federal Reserve lift-off.
At 06h59 GMT the rand extended losses, weakening 0.09 percent to 13.4505 per dollar to a 11-day low.
Stocks look set to open at least 326 points higher as equity futures on South Africa's blue-chip Top-40 index, which often act as a precursor of the actual index, rose 0.75 percent.
Yields on government bonds were mixed, with the benchmark 2026 issue up 5 basis points at 8.470 percent.
The rand had made some gains to the 13.3930 resistance level before sliding back as it continues to follow the global equity market roller coaster.
“The immediate bias is mildly to the upside but risks remain high given the global equity market swings. Volatility is not dropping away as fast as hoped,” said John Cairns a currency strategist at Rand Merchant Bank.
“Markets have been in this elevated state of volatility for two weeks. Despite early expectations that volumes would drop off, it now appears possible that they will remain elevated for some time.”
The market will be looking at a whole host of data today for clues when US initial jobless claims and trade balance figures comes out including local business confidence data.
But the all-important US jobs figure released on Friday will set the stage. If the numbers come out positive, it will bolster the case for a rate hike by the US Federal Reserve at next week's policy meeting.
Ratings agency Moody's expressed a cautious outlook on the South African economy yesterday but gave no indication that they are likely to downgrade the credit rating anytime soon, giving a bit of support for the rand.
With the Chinese markets set to remain closed into the weekend, South African market investors are likely to turn their attention to the European Central Bank Policy meeting today and on what its officials make of recent turmoil in financial markets.
REUTERS