The South African rand edged up in early trade on Friday, with strong gold prices underpinning the currency as investors awaited U.S. non-farm payrolls data later in the day for fresh clues on the Federal Reserve’s interest-rate path.
By 07:03 GMT, the rand was trading at 16.34 against the dollar, up about 0.2% from its previous close.
Gold, a key South African export, firmed and was on track for its biggest weekly gain since January, helped by weaker oil prices as hopes of peace in the Middle East saw inflation expectations drop.
The U.S. dollar was little changed against a basket of currencies as traders awaited U.S. non-farm payrolls data due at 1230 GMT, with economists in a poll expecting 80,000 jobs to have been added and the unemployment rate to hold steady at 4.2%.
“With today’s payrolls report and the long weekend ahead, traders are expected to remain cautious, with many preferring to maintain long U.S. dollar positions until there is greater clarity on the Fed’s policy outlook,” said Andre Cilliers, currency strategist at TreasuryONE.
On the domestic front, South Africa’s net foreign reserves rose to $71.76 billion at the end of July from $71.34 billion in June, central bank data showed.
On the Johannesburg Stock Exchange, the Top-40 index (.JTOPI), opens new tab was up 0.7% in early trade.
South Africa’s benchmark 2035 government bond was weaker in early deals, with the yield up 4 basis points to 8.43%.
AP
