Unchanged Rand value ahead of US jobs

SA rand behaved low against the dollar in lacklustre trade on Wednesday ahead of a European Central Bank interest rate decision and also the US non-farm jobs data later this week.  

According to SA timings at 17:47, the value of rand was 10.2725 against the dollar, 0.26% better than Tuesday’s closing level in New York.

Murat Toprak, an emerging market strategist at HSBC said that “The pricing we have seen today is rather irrelevant. We cannot be sure that the rand has been affected by any major factor other than euro/dollar pricings whose values are much flat.”

“Basically the market is waiting for the ECB tomorrow and the US non-farming payrolls on Friday. So, don’t be surprised if there is nothing really moving today.”

Far better job numbers than expected out of the US would back the case for the Federal Reserve to decrease its monthly bond purchases which have been an important source of cheaper dollar flow into the emerging markets like in South Africa.

Inspite of this inflow, the rand is still lower by more than around 21% against the dollar since long time in this year, along with the burning facts like strikes in the mining production and large twin deficits on the budget and the current account.

Again more violence was seen in the platinum sector this week when Lonmin, a former senior union official was shot dead.

While the government bonds ended up the session by some minor changes from the previous day, with the standard 2026 bond resulting in just 2 basis points more at 8.165 percent. The 2015 bond was flat at 6.055 percent.”- Reuters.