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Rand trades in ranges, tracks euro

Johannesburg – The rand was barely changed in afternoon trade on Friday from its midday levels.

A local trader said the local currency had recovered 'quite well' after a morning scare on news of Wall Street's drop on Thursday.

At 15:50 the rand was bid at R7.6952 to the dollar from R7.7442 at its previous close. It was bid at R9.7614 to the euro from its previous close of R9.7923 and was at R11.3290 against the sterling from R11.5210.

The euro was bid at $1.2694 from $1.2626 previously.

"The rand has recovered quite well following Thursday's plunge of the Dow. I think the market overreacted to the episode out of the US. In the short term, the rand will likely be range-bound at R7.65-R7.85, depending on the stability of the eurozone countries, particularly Greece," a local dealer said.

Dow Jones Newswires reported that the euro rebounded from 14-month lows against the dollar on Friday on a ray of optimism peering through the clouds of the Greek debt crisis, but the dollar took away some of the common currency's gains after a much better-than-expected US jobs report.

In its closely watched employment report, the Labour Department said nonfarm payrolls rose by a higher-than-expected 290 000 last month, the largest gain since March 2006. That followed an upwardly revised 230 000 increase in March. Economists polled by Dow Jones Newswires were expecting payrolls to rise by 180 000. The March figure was originally reported as a 162 000 increase.

Taking into account revisions to prior months, the US economy added an average of 143 000 jobs a month in the first four months of the year.

However, as a reminder of the labour market's continued weakness, the unemployment rate increased to 9.9% last month. Economists were expecting it to remain at March's 9.7% level.

The dollar was also up sharply against the yen, but failed to hold on to the intraday high it hit against the Japanese currency after the strong US nonfarm payroll numbers for April.

The jobs data show the US economy is marching forward, despite concerns of a global nature that sent markets on Thursday into freefall, analysts said.

The jobs report "should help remind market players that the US economy is picking up steam," said Michael Woolfolk, senior currency strategist at BNY Mellon in New York.

"This Greece debt crisis, which has spilled over into global financial markets, is not going to derail the global recovery."

 
 - I-Net Bridge
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