The South African (SA) Rand was muted in early trade on Friday as attention turned to highly awaited United States (US) jobs data for clues on the Federal Reserve’s next interest rate decision.
The Rand traded at 15.9975 against the Dollar, little changed from its previous close.
The US nonfarm payrolls report is due, and the unemployment rate is expected to hold steady at 4.1%.
The Rand, like other emerging market currencies, tends to take direction from global factors, including US economic data and geopolitical developments.
ETM Analytics said in a note that if employment growth comes in weaker than expected, it would support the argument for the Federal Reserve to keep interest rates unchanged, reduce expectations of a September rate hike, and likely help the SA Rand strengthen against the Dollar.
“A firm print, especially with wage pressures, would rebuild the case for tightening by year-end, lift the Dollar index and push the pair back towards 16.20 as emerging-market betas unwind,” said ETM Analytics.
SA’s benchmark 2035 government bond was slightly firmer in early deals, as the yield fell 1.5 basis points to 8.565%.
–Reuters–
