Rand steady amid firming dollar

Johannesburg - The rand remained well positioned in the afternoon session on Friday amid better than expected non-farm payrolls data in the US which boosted the dollar.

At 15:45 the rand was bid at R7.4272 to the dollar from R7.4755 at its previous close. It was bid at R10.0935 to the euro from its previous close of R10.1470 and was at R11.1638 against the sterling from R11.2208.

The euro was bid at $1.3558 from $1.3581 previously.

A local currency trader noted the rand found support at R7.42 against the dollar, and within a range of R7.42-R7.52.

The Dow Jones Newswires reported that the dollar gained against the euro and yen on Friday as a better-than-expected US jobs report pointed to a US economy that continues its march to recovery.

The healing labour market, seen as key to the economy's turnaround, leads investors to the greenback as the Federal Reserve is now seen as more likely to increase key interest rates and return expansionary monetary policy to normal.

Friday morning, the euro was at $1.3546 from $1.3576 late on Thursday, according to EBS via CQG. The dollar was at ¥90.10 from ¥89.06, while the euro was at ¥122.10 from ¥120.98.

It is customary after key data releases, such as the payrolls report, for currencies to trade in extremely choppy waters.

The better-than-expected US data also encouraged higher-yielding, risk-positive currencies, as it paints a brightening picture of the entire global recovery, leading the Australian, New Zealand and Canadian dollars to strengthen.

The US economy shed fewer jobs than expected in February and the unemployment rate was steady at 9.7% despite stormy weather on the East Coast last month which the government said may have temporarily hit payrolls and work hours.

The Labour Department, which carried out its surveys at the same time that the snowstorms battered the East Coast, said in a report on Friday that nonfarm payrolls fell by 36 000 compared with a revised 26 000 drop in January.

Economists polled by Dow Jones Newswires were expecting payrolls to fall by 75 000 mainly because of the severe weather. The January figure was revised from an originally reported 20 000 decline.

The unemployment rate, which is calculated using a different household survey, remained at 9.7% last month. Economists had forecast the jobless rate would edge higher to 9.8%.

"It certainly is better than consensus and is better than our view," said Michael Woolfolk of Bank of New York Mellon in New York. He had been expecting a 100 000 drop in jobs. "It certainly suggests that we are very close to turning nonfarm payrolls into positive territory this spring."

- I-Net Bridge