JOHANNESBURG (Reuters) - South Africa’s rand inched higher against the dollar in early trade on Thursday, just off 14-year lows, as the local market remained in wait-and-see mode ahead of Friday’s all-important U.S. employment data.
Traders and analysts said the rand was battling to gain traction against the greenback as it mirrors the steady yet deteriorating local economy. South Africa is dogged by a weak mining sector and soft economic indicators that underscore its subdued growth prospects.
The local unit was trading at 12.76 by 0639 GMT, up 0.15 percent from Wednesday’s close of 12.7795.
The local currency sold off dramatically in late Wednesday trade, dipping as low as 12.83 after mixed data out of the United States fuelled expectations for a September Federal Reserve rate hike, putting commodity currencies under pressure.
“(The rand) opens slightly stronger this morning at 12.77 but is poised for further losses as the market readies itself for tomorrow’s U.S. non-farm payrolls data,” said Nema Ramkhelawan-Bhana, a macroeconomic analyst at Rand Merchant Bank.
“The rand is as supple as a marionette puppet dancing about to the Fed’s tune.
South African government bonds also recovered, with the 2026 benchmark yielding 1 basis points lower at 8.26 percent.
Reporting By Nqobile Dludla; Editing by Gareth Jones