Rand retreats as focus shifts to US jobs report

Johannesburg - The rand weakened on Friday, giving back modest gains of the previous session in cautious trade ahead of jobs data from the United States that investors will eye for clues on the likelihood of a rate hike there this year.

The rand retreated 0.24% to R14.6365 per dollar at 08:30 versus overnight close of 14.6015.

Government bonds extend gains from previous session, while the yield on benchmark 2026 paper down 3 basis points to 8.975%.

Local assets remained sensitive to the fallout from an asset mangers decision to freeze funding to government firms citing political interference and mismanagement.

Blue chip futures index was down 0.4%, indicating the bourse will open lower when trade resumes at 09:00.

"The crosses against the rand have maintained their level and might warrant attention from local exporters, but it should be a quiet morning before the (US Fed) figures," said Umkhulu Consulting's Adam Phillips on Friday. "However, we just don't know what the local news is around the corner, although we have come a long way."

"(The dollar/rand) made a new high at R14.75 yesterday afternoon but managed to close meaningfully lower, breaking the sustained upwards trend as the rand showed some relative outperformance for the first time in weeks," said RMB's John Cairns on Friday. "The scope is there to edge lower as we await more clarity on the Fed and the local political situation."

"Further political news could emerge at any time," he said. "The Presidency has announced that Minister Gordhan and President Zuma will jointly attend the G20 meeting. They will presumably provide a joint front on how unified our country is and how policy is successfully moving in a positive direction."

"Today don’t be too bold," said Wichard Cilliers, Head of Dealing & Director at TreasuryOn. "Simply keep your positions square and look to take advantage of any breaks of the USD/ZAR to hedge your requirements. Again caution must be exercised going into the NFP’s thus an expected trading range 14.40/14.80 can be expected."