Johannesburg - The South African rand was on the
front foot in late trade on Thursday as the dollar came under pressure after
US data showed that new claims for jobless benefits rose more than
economists expected last week.
At 15:45 the rand was bid at 7.4901 to the dollar from 7.5725 at its
previous close. It was bid at 11.0431 to the euro from its previous close of
11.1632 and was at 12.2000 against sterling from 12.3342.
The euro was bid at $1.4735 from $1.4739 overnight.
"The rand has firmed after the US employment data, with the dollar
coming under some pressure. But there is still some nervousness around the
country downgrade issue," a local currency trader said.
He said the rand had paid little attention to the news that South
Africa's current account deficit narrowed to a four-year low in the third
quarter of the year.
The South African Reserve Bank's latest Quarterly Bulletin released on
Thursday morning revealed that South Africa recorded a current account
deficit on its balance of payments of -3.2% of GDP in the third quarter of
2009 from a revised -3.4% (-3.2%) in the second, the smallest since the
second quarter of 2005 when it was -2.7%.
An I-Net Bridge Econometer reflected consensus expectations in the
marketplace for a deficit of -3.3% of GDP, with forecasts among the 14
economists varying from -4.7% to -2.5%.
A balance of payments surplus of R6.260bn was recorded from a
surplus of R7.069bn in the second quarter. This time, unrecorded
transactions of -10.263 billion rand was seen from inflows of R285m in the second quarter.
The balance on the financial account - which includes unrecorded
transactions - was reported at R30.498bn from R27.893 before. The Sarb noticed that this improvement occurred as international
investors' appetite for investment in emerging-market economies improved
further.
Dow Jones Newswires reports that the US dollar was lower after a weekly
report by the Labour Department showed that the number of US workers filing
new claims for jobless benefits rose more than economists expected last
week.
Total claims lasting more than one week, meanwhile, fell.
Initial claims for jobless benefits rose by 17 000 to 474 000 in the
week ended December 5. The previous week's level was unrevised at 457 000.
Economists surveyed by Dow Jones Newswires expected an increase of
8 000 initial claims.
An economist at the Labour Department said Thursday that an increase
in claims is generally expected during this time of year because it reflects
data from the week after Thanksgiving and because construction lay-offs tend
to occur in that week.
Commodity-linked currencies such as the Australian and Canadian dollars
rallied sharply overnight on the back of a drop in the unemployment rate in
Australia to 5.7% in November from 5.8% in October and signs from New
Zealand's central bank that it may remove monetary stimulus by mid-2010. The
Swiss National Bank also took steps in that direction.
The euro, despite bouncing back from its intraday low, remains under
pressure on continued concerns over credit quality of some of euro-zone
countries. As the focus shifted back to demand for risk, the dollar was
little changed versus the euro but up against the yen.
- I-Net Bridge