South African rand treads water before US jobs data as markets assess Fed rate path

JOHANNESBURG: The South African rand was muted in early trade on Friday as attention ​turned to highly awaited U. S. jobs data ‌for clues on the Federal Reserve’s next interest rate decision. At 0625 GMT the rand traded at 15. 9975 against ​the dollar, little changed from its ​previous close. The US nonfarm payrolls report is due ⁠at 1230 GMT and the unemployment rate ​is expected to hold steady at 4. 1%. The rand, ​like other emerging market currencies, tends to take direction from global factors, including US economic data and geopolitical ​developments. South African rand muted ahead of business activity PMI ETM Analytics said in a note that if ​employment growth comes in weaker than expected, it would support ‌the ⁠argument for the Federal Reserve to keep interest rates unchanged, reduce expectations of a September rate hike, and likely help the South African ​rand strengthen ​against the ⁠dollar. “A firm print, especially with wage pressures, would rebuild the case for ​tightening by year-end, lift the USD ​index ⁠and push the pair back towards 16. 20 as emerging-market betas unwind, ” said ETM Analytics. South Africa’s benchmark ⁠2035 government ​bond was slightly firmer ​in early deals, as the yield fell 1. 5 basis points to ​8. 565%.

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