Rand rallies as dollar stalls, stocks recover

The rand gained on Friday as US job growth slowed more than expected, easing pressure on emerging market currencies that have retreated this week on likely return of a greenback rally.

At 1530 GMT the rand was 1.25% firmer at 13.28, revved up after the release of the US nonfarm payrolls data.

The softer-than-anticipated data pushed the dollar lower, pausing a four-day rally spurred by a bout of risk aversion following US sanctions on Turkey, another wave of trade war concerns, and China’s decision to further devalue its currency.

While the soft US jobs figures helped the rand claw back losses following President Cyril Ramaphosa’s Tuesday speech declaring the ruling party would press ahead with amending the constitution to speed-up land reform, traders said the rand was set to weaken next week.

“As the final move in the dollar plays out the USDZAR will rally to 13.61 with an extended rally back to the 13.90’s top,” analysts at Nedbank Neels Heyneke and Mehul Daya said in a note.

The rand tested the 200-week moving average at 13.40, indicating an overall long-term trend weaker.

Bonds were firmer, with the yield on the benchmark paper due in 2026 down 0.5 basis points to 8.68%.

On the bourse, the market ended Friday over one% higher, led by advancers such as packaging company Mondi and diversified precious metals producer Sibanye .

The All-share index was up 1.15% to 57,118 points while the top 40 index rose by 1.29% to 50,988 points.

Mondi jumped almost 6% after it reported a 25% increase in half-year underlying profit on Friday..

Sibanye-Stillwater said on Friday it expected to swing to a half-year profit from a steep loss last year, boosted by its platinum business and the inclusion of its US operations.

Shares in Sibanye closed higher by 5.30% to R8.71.