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Johannesburg - The rand steadied against the dollar on
Friday and was on course to post its best week since early July as it recovered
from a sell-off in the past few weeks.
The rand broke through the psychologically important level
of 8 to the dollar in the previous session, after Europe’s measures to keep
banks afloat encouraged a return to riskier assets.
September was the rand's worst month since the start of the
financial crisis in late 2008, with the currency hitting a 28-month low at
R8.4950. Some analysts have said the sell-off was overdone and the currency was
due for a correction.
With a bare local economic calendar, market players will
look to the US non-farm payrolls data later in the session for direction.
"It's going to be a little bit quieter today with eyes on US
non-farm payrolls. I'm expecting volatility to continue because liquidity has
been so terrible," said one trader.
The rand was trading at R7.94 to the dollar at 06:49 GMT,
not far from Thursday's New York close of R7.9350.
A break of R7.86 would open the door for R7.74, Standard
Bank said in a note to clients, adding that disappointing US data could spark a
retreat toward R8.10.
The rand showed muted reaction to data that the Reserve
Bank’s foreign exchanges holdings fell in September, partly due to currency
weakness.
Government bonds firmed as investors used weakness of the
last few weeks as a reason to buy back into local debt. Foreign investors have
bought R317m worth of bonds in the past five days.
The yield on the 2015 bond fell three basis points to 6.78%
and that on the 2026 note was down by the same margin to 8.49%.
Domestic stocks looks set for a positive start at 07:00 GMT,
with the JSE's Top 40 - (Tradeable) [JSE:J200] index December futures contract
up 1.15%.
