JOHANNESBURG – South Africa’s (SA) rand recorded its biggest daily gain against the dollar in three months on Friday, buoyed by the end of a gold strike at some mines and weak US jobs data that weighed on the greenback.
Reuters
The rand strengthened more than 2,2% to a session high of 10,0060 to the dollar, its firmest in nearly three weeks, and was up 2,15% at 10,0150 by 5:35pm SA time from Thursday’s close in New York.
A shutdown in the gold sector of Africa’s largest economy continued to peter out on Friday as some miners returned to work three days after laying down their tools.
“Some of the unions came to the party today. The mine strike doesn’t look like it is going to be as protracted as it looked on (last) Monday-Tuesday,” Ian Martin, a rand trader with Rand Merchant Bank, said.
The rand was also boosted by weaker-than-expected US non-farm payrolls numbers which dented the case for the US Federal (Fed) Reserve to begin unwinding its monetary stimulus programme soon.
The rand has dropped more than 18% against the dollar since the start of 2013 as investors worried about domestic labour strife and also due to a global sell-off of emerging markets currencies ahead of the anticipated Fed move.
“The US data that came out today was a little bit weaker and it just sort of delays the tapering story a little bit,” Rand Merchant Bank’s Martin said.
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Government bond prices were also stronger, with the yield on the 2026 paper dropping 15 basis points to 8,415% while the yield on the 2015 issue was down by 12 basis points to 6,34%.
“The bulk of the movement occurred after the release of the non-farm payrolls, which fell well short of expectations and all the indicators led to the strengthening across the bond curve,” Richard Farber, a bond trader with World Wide Capital Securities, said.
