Home Business South Africa’s rand on the front foot as dollar slips

South Africa’s rand on the front foot as dollar slips


JOHANNESBURG   –   South Africa’s rand was firmer early on Monday, inching ahead to a new two-week best as slower-than-expected growth in wages in the United States pressured the dollar and solidified the local currency’s break of key technical levels.

At 0630 GMT the rand was 0.22 percent firmer at 13.4350 per dollar from a close of 13.4600 on Friday in New York.

The dollar index was 0.15 percent lower in early trade.

It was the first time since June 22 the rand had closed beneath 13.50, a key inflection point after it tumbled to a seven-month low of 14.00 in a broad emerging market rout as investors lured by rising rates in the U.S. fled riskier assets.

U.S. jobs data on Friday showed a slower-than-expected growth in wages, suggesting the Federal Reserve may go slow on future rate hikes, boosting the rand and other EM assets.

Traders see 13.20 as the next key level, with mining and manufacturing output data later in the week the main onshore drivers of sentiment.

Lingering anxiety over the impact on global growth of the brewing trade spat between Beijing and Washington will restrain rand bulls, traders said.

Bonds tracked the firmer currency, with the yield on the benchmark bond due in 2026 down 2 basis points at 8.64 percent.

The Johannesburg Stock Exchange was set to open higher at 0700 GMT, with the Top 40 futures index up 1.2 percent.(Reuters)

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