Rand claws back another 1% against dollar, but the recovery looks tentative
The local currency is making its way back towards R15/$ but could come under pressure later on Friday if a US jobs report shows continued economic strength
The rand was firmer against major global currencies on Friday morning, finding support despite continued gloominess for emerging markets.
The rand slipped earlier this week as investors priced in additional risk for credit ratings downgrades, after data showed SA slipped into a technical recession in the second quarter.
The recession surprised most economists, and leaves the government grappling with a more difficult task in reining in the budget deficit.
The global focus is on US monetary policy, with the US nonfarm payrolls report for August due at 2.30pm local time.
The report is crucial to shaping expectations for the US Federal Reserve meeting later in September, said BK Asset Management MD Kathy Lien.
"With the market pricing in a 96.3% chance of a hike, the US economy would have to report job losses for the central bank to pass on tightening this month," she said.
Despite the rand’s slip to two-year lows against the dollar earlier this week, analysts said the local currency looked a bit oversold, with projections it would remain below R15/$ by the end of the year.
At 10.22am the rand was at R15.1584 to the dollar from R15.3343, at R17.6536 to the euro from R17.8246 and at R19.6078 to the pound from R19.8223. The euro was at $1.1645 from $1.624.
Local bonds tracked rand gains, with the benchmark R186 10-year government note last seen at 9.115% from 9.18%, while the R207 was at 7.755% from 7.815%.