In South Africa Rand firms, eyes on U.S. jobs data

The rand could strengthen further if the U.S. employment report later in the session shows job gains but remains weak enough to discourage rate increases by the Federal Reserve in the near term.

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A South African child holds a 50 rand note in a file photo. play A South African child holds a 50 rand note in a file photo.
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South Africa's rand firmed slightly against the dollar on Friday as investors returned to riskier assets after a string of positive U.S. economic data and a bounce in commodity prices.

At 0645 GMT, the rand traded at 15.6145 versus the dollar, from its New York close of 15.6500 on Thursday.

The rand could strengthen further if the U.S. employment report later in the session shows job gains but remains weak enough to discourage rate increases by the Federal Reserve in the near term.

Higher U.S. interest rates traditionally trigger an outflow of investments from emerging markets.

"Today the U.S. data will undoubtedly provide the catalyst for some significant price action," Nedbank analysts said in a note.

"Over the past week the rand has recovered from the highs around 16.2000 posted on Monday as politicians endeavoured to calm market concerns, making it among the better performers among its emerging market peers."

Since Monday, the rand has recovered after President Jacob Zuma said he supported Finance Minister Pravin Gordhan, following reports of a fallout between the two last week that sent the currency to its biggest daily loss since 2011.

Stocks were set to open slightly lower at 0700 GMT, with the JSE securities exchange's Top-40 futures index down 0.12 percent.

In fixed income, the yield for the benchmark instrument due in 2026 was down 2 basis points to 9.355 percent.

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