Johannesburg - The rand was flat against the
dollar in noon trade on Friday as the euro remained in tight ranges
ahead of key US non-farm payrolls due out later today.
The single currency, however, received some good news this
morning after eurozone private sector activity returned to modest growth
in January, raising hopes that the downturn in Europe might not be as
bad as was first thought.
The final composite purchasing managers' index for the euro area increased to 50.4 in January from 48.3 in December.
"We're just waiting for payrolls data, but when it comes to
talks around Greek debt, a resolution looks less and less like a
reality," a local currency trader said.
"While eurozone private sector activity showed a positive
number, we must remember that underlying fundamentals in the region are
still very weak," he added.
At 11:41 local time, the rand was trading at R7.6326 to the
dollar from its previous close of R7.6371. It was trading at R10.0480 to
the euro from R10.0349 before, and at R12.0851 against sterling from
R12.0692 previously.
The euro was trading at $1.3162 from its previous close of $1.3136.
Barclays Capital said in a note that rand bulls had powered
ahead on Thursday once again, as a result of an upbeat global
environment.
"Not only were participants still taking heart from this
week's encouraging global manufacturing data, but the fact that Fed
Chairman Bernanke reiterated yesterday that US monetary policy would
remain accommodative for a while longer was also supportive of risky
assets and commodity prices.
"This morning's disappointing services data out of China has
curbed risk appetite somewhat, but if this afternoon's US employment
report impresses and/or we have some positive decision on the Greek PSI
front, then we would expect risky assets to resume a bullish trend into
the weekend."
Even though the rand had recovered aggressively over a
relatively short space of time, if global risk appetite accelerated
further, then rand bulls could realistically look for a move down to
R7.50 - if not R7.32 - in the near term against the dollar, Barclays
Capital added.
Meanwhile, Dow Jones Newswires reported that in foreign
exchange markets, currency majors traded in tight ranges ahead of the US
jobs data while euro investors were keenly awaiting news on the Greek
debt talks.
"The euro has enjoyed short stays above US$1.32 in the last
week but for the most part its home has been in the US$1.3080 to
US$1.3181 range," said Tim Waterer, senior currency dealer at CMC
Markets in Sydney in a note.
"The currency may be poised for a push beyond $1.3250 if the
Greece debt-deal gets penned before market patience wears thin," he
said.
A Dow Jones survey of economists' forecasts US unemployment in
January to remain unchanged from the previous month at 8.5%, while
forecasts for non-farm payrolls expected 125 000 jobs to have been
created in January, after 200 000 new jobs the previous month.
However, US non-farm payrolls were likely to disappoint Credit
Suisse said with the expectation that payrolls would rise to only
120 000 in January.
Citi was also downbeat on US non-farm payrolls, only expecting a 100 000 rise.
Once the jobs data was out, attention was expected to shift back to the on-going Greece debt write-off negotiations.