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Rand strengthens despite solid US payroll data

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JOHANNESBURG — The rand strengthened on Friday afternoon despite a United States nonfarm payroll report showing the world’s biggest economy created 252 000 jobs in December, above the consensus forecast of 240 000.

At 3.55pm the rand was at R11,5360 from a previous close of R11,5716.

Against the euro the rand was at R13,6033 from R13,6445 and at R17,4423 against the pound from R17,4611.

The euro was at $1,1791 from $1,1791 at Thursday’s close.

A local trader said the rand weakening in anticipation of the employment numbers may have been “overdone”, which was why the currency strengthened following the report.

The rand usually weakens on good US data as once the US economy gets back on track, it seems clear that the US Federal Reserve will raise interest rates — a move that would strengthen the dollar further.

Dollar strength is usually a bad sign for emerging markets, as capital moves back to the US, generally at the expense of emerging markets.

Dow Jones Newswires reported the dollar pared losses against the yen and the euro on Friday after a stronger than expected US jobs report bolstered market expectations for the Federal Reserve to raise interest rates around mid-year.

The dollar rose to 119,52 yen, from 119,00 yen before the report was released, trimming losses to trade down 0,1% for the day. The euro dropped to $1,1791, from $1,822 ahead of the report, trading flat for the session and nearing its lowest level in nine years.

— BD Live

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