Picture: REUTERS
Picture: REUTERS

The rand was steady against major global currencies on Friday morning, receiving support from weak US economic data, which has fuelled the hope that the US Federal Reserve will soon cut interest rates.

That rand had risen 0.87% against the dollar on Thursday, as the greenback came under pressure from weaker-than-expected US services data.

This spurred a jump on Thursday in rate cut odds to above 90% for the Fed decision later in October, said NKC African Economics analysts in a note. The expected trading range for the rand on Friday is R15.05/$-R15.15/$, the analysts said.

At 9.10am the rand was flat at R15.1717/$, while it had weakened 0.16% to R16.6461/€ and 0.21% to R18.7318/£.

Focus now shifts to US nonfarm payrolls data due at 2.30pm SA time, with the consensus that employers added 146,000 jobs in September, and the unemployment rate remained steady at 3.70%.

Should the number disappoint, the rand could test R15/$, said TreasuryOne senior dealer Andre Botha in a note, adding that the local currency should be range-bound until this data release.

The rand should benefit from US interest rate cuts, as they make SA’s relatively higher-yielding bonds even more attractive to investors.

According to Bloomberg data, the market is pricing in an 84.2% chance of the Fed cutting rates by 25 basis points on October 30, up from 43.4% a week ago.