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Rand battered by US news

Jan 09 2009 18:23

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Johannesburg - The South African rand was on the back foot in late trade on Friday as the dollar rallied on a December employment report showing a continued weak US labour market.

Dow Jones Newswires reports that in the week's most highly anticipated economic news, the Labour Department announced Friday that nonfarm payrolls tumbled 524 000 in December. November was revised to show an even steeper decline of 584 000, the worst since 1974. The economy lost 2.6m jobs in 2008, the data showed, the most since World War II ended in 1945.

One analyst said the comparison to the November jobs report was chilling, even amid low expectations.

Initially, the rand firmed on the data as it wasn't quite as bad as the most pessimistic estimates. But it started losing ground again as stock markets turned lower on the data, quelling risk appetite.

At 17:20 the rand was bid at 9.7253 to the dollar from an overnight close of 9.6341. It was bid at 13.1334 to the euro from a previous 13.2314 and at 14.7205 against sterling from 14.6968 before.

The euro was bid at US$1.3511 from US$1.3702 overnight.

Local dealers pointed out however that the local market remained thin.

"We're likely to see the local currency continue to bounce around a bit until liquidity returns to the market," one local currency trader said.

- I-Net Bridge

 
 
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