Rand pauses, with focus on US jobs report

The South African rand paused early on Friday, ahead of a closely watched US jobs report that kept the dollar on the back foot.

The Federal Reserve has made a labour market recovery a condition for paring back its pandemic-era asset purchases, making Friday’s non-farm payrolls data a major market event.

Along with other risk-sensitive currencies, the rand moves regularly on shifts in the outlook for US monetary policy.

It gained strongly against the greenback early this week, after a dovish speech by Fed Chair Jerome Powell last Friday suggested the bank was in no rush to raise interest rates.

At 0645 GMT, the rand traded at R14.48 against the dollar, barely changed from its previous close of R14.48.

Locally, investors will study PMI data at 0715 GMT for clues about the pace of South Africa’s economic recovery from Covid-19.

Next week, the statistics agency will release second-quarter gross domestic product numbers, which will provide a fuller picture.

The government’s benchmark 2030 bond dipped early on Friday, with the yield rising 1 basis point to 8.77%.