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South Africa's rand steady ahead of US jobs, ECB rate decision
November 6, 2013 / 4:21 PM / in 4 years

South Africa's rand steady ahead of US jobs, ECB rate decision

JOHANNESBURG, Nov 6 (Reuters) - South Africa’s rand held in a narrow range against the dollar in lacklustre trade on Wednesday ahead of a European Central Bank interest rate decision and U.S. non-farm jobs data later in the week.

At 1547 GMT the rand was at 10.2725 to the dollar, 0.26 percent softer than Tuesday’s closing level in New York.

“The price action we’ve seen today is insignificant. We cannot say the rand has been driven by any major factor other than euro/dollar movements, and euro/dollar is pretty much flat,” said Murat Toprak, an emerging market strategist at HSBC.

“The market is basically waiting for the ECB tomorrow and the U.S. non-farm payrolls on Friday so it is not very surprising to have nothing really moving today.”

Stronger-than-expected jobs numbers out of the U.S. would back the case for the Federal Reserve to begin tapering its monthly bond purchases which have been a key source of cheaper dollar inflows into emerging markets like South Africa.

Despite these flows, the rand has still fallen more than 21 percent against the dollar so far this year, dragged lower by the negative impact from strikes that have hit mining production and large twin deficits on the budget and the current account.

There was more violence in the platinum sector this week, when a former senior union official at platinum producer Lonmin shot dead.

Government bonds ended the session little changed from the previous day, with the benchmark 2026 bond yielding just 2 basis points more at 8.165 percent. The 2015 bond at the shorter end of the curve was flat at 6.055 percent.

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