South African Rand Steady Ahead of US Jobs Data; Reserves Rise, 2035 Yield Edges Up

The South African rand was little changed in early trade on Friday as traders looked ahead to US labour-market data later in the day for signals on the Federal Reserve’s policy trajectory. At 0719 GMT, the rand traded at 16.54 to the dollar, close to its previous close of 16.5225.

Adam Phillips, a treasury specialist at Umkhulu Treasury, said the market expected US non-farm payrolls growth of 45,000 compared with 64,000 previously, with the unemployment rate seen at 4.6%. He added that the government shutdown appeared to be moving toward an end, but he did not expect the data to provide a firm trading direction.

The rand had rallied this week to a near three-year high as sentiment toward South Africa stayed positive, with the JSE stock index hitting record levels and bond yields subdued. Andre Cilliers, a currency strategist at TreasuryONE, said the rand was consolidating around the 16.50 level after a correction over the previous two days from near three-year highs.

Cilliers added there was talk the Reserve Bank had absorbed some of the recent strong dollar inflows into the market to build foreign reserves. South Africa’s central bank reported that net foreign reserves rose to $71.14 billion at the end of December from $70.02 billion in November.

In early deals, South Africa’s benchmark 2035 government bond was softer, with the yield up 5 basis points to 8.375%.

‍