Rand firmer ahead of local manufacturing data

Markets
THE rand was stronger against major currencies yesterday morning, extending its gains from Friday afternoon, following the release of the United States jobs report.

THE rand was stronger against major currencies yesterday morning, extending its gains from Friday afternoon, following the release of the United States jobs report.

At 8:25am the rand was at R11,4783 from a previous close of R11,4808.

Against the euro the rand was at R13,6206 from R13,6282 and at R17,4160 against the pound from R17,4379.

The euro was at $1,1864 from $1,1869 at Friday’s close.

US nonfarm payrolls data for December 2014 were better than expected, with the US economy adding 252 000 jobs, higher than the consensus of 240 000.

The unemployment rate declined to 5,6%.

Although the payroll number was robust, average hourly earnings fell 0,2% on the month and were up only 1,7% year on year.

Barclays Research said in an early morning note that the US labour report had been positive for the rand. “Although the rand weakened to R11.62 to the dollar on Friday morning, it strengthened back down to R11,49 in the wake of a mixed US employment report, which implied that there is still no urgent need for the Federal Reserve to start hiking interest rates. Friday’s recovery ensured that the rand is back to its strongest levels since mid December,” Barclays said.

The research team said rand trading volumes were expected to increase as most market participants would return to work this week. This would help to reduce some of the choppy trade that was seen last week.

“The trade-weighted dollar has stopped strengthening this morning and, considering that we are softer than consensus with regards to this afternoon’s domestic manufacturing data, we believe that extended rand strength might be difficult to achieve today,” Barclays said. – BD Live