South Africa's rand softens after failing at key resistance

May 7, 2015 2:34 PM

JOHANNESBURG (Reuters) - South Africa's rand eased against the U.S. dollar on Thursday after failing to push through the stubborn 12/$ resistance level, while investors waited for direction from U.S. jobs numbers due in the next session.

South African bank notes featuring images of former South African President Nelson Mandela (R) are displayed next to the American dollar notes in this photo illustration in Johannesburg, in a file photo. REUTERS/Siphiwe Sibeko

The weak state of the domestic economy was also in focus after Finance Minister Nhlanhla Nene told parliament a sluggish global recovery and domestic constraints such as power shortages were holding back growth.

At 1504 the rand had softened 0.27 percent to 12.0450 against the dollar compared with its closing level at 12.0125 in New York.

"We’ve seen it struggling to make a move from this 12.00 rand against the dollar handle where it has been consolidating for the past couple of sessions," said Jana van Deventer, market analyst of ETM Analytics.

"We believe that the U.S. data (non-farm payroll) tomorrow will be key in providing directional momentum for the currency into the weekend," the market analyst added.

A string of weaker-than-expected U.S. data has prompted investors to push back bets on when the Federal Reserve will start hiking interest rates, with some now not expecting rises until next year.

In fixed income, the yield for the 2026 benchmark was down 1 basis points to 8.13 percent.