Rand softer in cautious trade ahead of US jobs release

The rand opened weaker on Friday, giving back some of the gains from the previous session as investors treaded cautiously ahead of employment data in the United States.

At 0650 GMT the rand was 0.18% weaker at 13.56 per dollar, having rallied as far as 13.50 overnight after minutes from the Federal Reserve’s June meeting struck an even tone, spurring some short-buying while the greenback remained on pause.

Since touching the 14.00 psychological barrier last week to its weakest in seven months the rand has recovered, pushing below successive technical resistance points at 13.80 and 13.60 in a broad emerging market relief rally.

With a brewing trade war between the United States and China and rising lending rates in developed markets, sentiment towards EM’s remains soft, leading traders to limit large bets and pick up profits on short-term strategies.

On Friday a Reuters poll found the median forecast for the rand in 12 months showed it would trade around 13.50, although the range of forecasts was wide with the most bearish forecaster saying it will weaken to 15.00 per dollar.

Bonds were flat, with the yield on the benchmark bond due in 2026 unchanged at 8.72%.

The Johannesburg Stock Exchange was set to open higher at 0700 GMT, with the Top 40 Futures Index up 0.74%.