Rand steady as dollar slips on upbeat EU employment numbers

The rand was largely unchanged on Monday afternoon, trading within a tight range as the euro clawed back some lost ground against the dollar.

Investors have remained focused on trade tensions in recent weeks as the US and China have ramped up tariffs on each others′ imports. Still, many have drawn comfort from the US′s agreements with other large trading partners in recent months, including the EU, Mexico and now Canada, Dow Jones Newswires reported.

Canada and the US reached consensus within the framework of the North American Free Trade Agreement (Nafta) on Sunday after a year of tough negotiations. Only last week it seemed unlikely that an agreement would become reality.

The EU′s statistics agency said the number of unemployed people across the eurozone fell to 8.1% in August, its lowest level since November 2008. This boosted the euro after the dollar earlier gained on the last-minute deal reached between the US and Canada.

The Russian ruble, rand and Turkish lira have rebounded against the dollar in the past few weeks, as investors have bought back the currencies after going short on them previously due to concerns about emerging markets,  Société Générale analysts said in a note. “That is largely down to short-covering.”

The recent fall in emerging-market currencies has “been significantly bigger than the capital outflow from those markets” and market participants have returned to buy them back, they noted.

At 3pm the rand was at R14.1268 to the dollar from R14.113, at R16.4012 to the euro from R16.408 and at R18.4811 to the pound from R18.4066.

The euro was at $1.1610 from $1.1618 after earlier weakening to $1.1574.

Local bonds were largely unchanged with the R186 still failing to convincingly break through the 9% level. It was last bid at 9.02% from 8.99%.

The benchmark US 10-year treasury trended weaker with a yield of 3.0755% from 3.0606%.

The German 10-year bund was at 0.4935% from 0.4741%.