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Johannesburg – The South African rand firmed in morning play on
Friday, but within a range ahead of June non-farm payrolls data in the US.
At 08:58 local time the rand was bid at 7.6931 to the dollar from 7.7343 at Thursday's close. It was bid at 9.6080 to the euro from 9.6664 before and at 11.6597 against sterling from 11.7166 at its previous close. The euro was bid at $1.2484 from $1.2501 overnight.
A local trader said: "We saw a big rand/euro move yesterday, but things have quietened down this morning, with the rand in a range against the dollar ahead of non-farm data. The numbers expected aren't good, so there should be a reaction on the markets."
The trader also noted US Independence day on July 4, to be celebrated as a holiday on Monday.
RMB analysts noted in their Friday morning report that yesterday's international PMI data made it clear that the pace of the global economic recovery was slowing.
"While this had been expected, the reality is still causing market ructions. Indeed, if it hadn't been for some sharp euro/US dollar movements, US dollar/rand would have pushed to 7.90 even 8.00 yesterday. It was instead left to euro/rand to do the running, pushing up 3% to a peak of 9.70," the analysts said.
"These moves are interesting, arguably suggesting that the markets are now more worried about a global double-dip than the European fiscal problems. Our take is that while a double-dip back into recession certainly can't be ruled out, the core view is rather for a moderation rather than a collapse in growth. As we set out yesterday, this is enough to create a negative trend on the rand but not a blow-out," RMB said.
"Conditions have at least settled this morning and if all was left as it were, US dollar/rand would probably be able to make it back down from 7.80 to 7.65 or so. All eyes are on the US jobs market. Yesterday's weekly data suggested that there is no sign yet of significant jobs creation. If today's formal June monthly (non-farm payrolls) figure in turn disappoints, then we are going to experience another bout of volatility in the markets," the group said.
It said that dismal figures would create panic. "Overall then, both US dollar/rand and euro/rand biased lower in the morning but with moves restricted before the big number and almost certain volatility thereafter," RMB concluded.
Dow Jones Newswires reports that additional gains in the dollar and euro may be short-lived as players adopt a cautious approach ahead of the key US non-farm payrolls data for June, slated for release at 1230 GMT.
The euro may move in step with the dollar, a dealer said. A Dow Jones Newswires poll of economists tipped June non-farm payrolls to show a 110 000 decline in jobs, compared with a 431 000 rise in May.
- I_Net Bridge
At 08:58 local time the rand was bid at 7.6931 to the dollar from 7.7343 at Thursday's close. It was bid at 9.6080 to the euro from 9.6664 before and at 11.6597 against sterling from 11.7166 at its previous close. The euro was bid at $1.2484 from $1.2501 overnight.
A local trader said: "We saw a big rand/euro move yesterday, but things have quietened down this morning, with the rand in a range against the dollar ahead of non-farm data. The numbers expected aren't good, so there should be a reaction on the markets."
The trader also noted US Independence day on July 4, to be celebrated as a holiday on Monday.
RMB analysts noted in their Friday morning report that yesterday's international PMI data made it clear that the pace of the global economic recovery was slowing.
"While this had been expected, the reality is still causing market ructions. Indeed, if it hadn't been for some sharp euro/US dollar movements, US dollar/rand would have pushed to 7.90 even 8.00 yesterday. It was instead left to euro/rand to do the running, pushing up 3% to a peak of 9.70," the analysts said.
"These moves are interesting, arguably suggesting that the markets are now more worried about a global double-dip than the European fiscal problems. Our take is that while a double-dip back into recession certainly can't be ruled out, the core view is rather for a moderation rather than a collapse in growth. As we set out yesterday, this is enough to create a negative trend on the rand but not a blow-out," RMB said.
"Conditions have at least settled this morning and if all was left as it were, US dollar/rand would probably be able to make it back down from 7.80 to 7.65 or so. All eyes are on the US jobs market. Yesterday's weekly data suggested that there is no sign yet of significant jobs creation. If today's formal June monthly (non-farm payrolls) figure in turn disappoints, then we are going to experience another bout of volatility in the markets," the group said.
It said that dismal figures would create panic. "Overall then, both US dollar/rand and euro/rand biased lower in the morning but with moves restricted before the big number and almost certain volatility thereafter," RMB concluded.
Dow Jones Newswires reports that additional gains in the dollar and euro may be short-lived as players adopt a cautious approach ahead of the key US non-farm payrolls data for June, slated for release at 1230 GMT.
The euro may move in step with the dollar, a dealer said. A Dow Jones Newswires poll of economists tipped June non-farm payrolls to show a 110 000 decline in jobs, compared with a 431 000 rise in May.
- I_Net Bridge
