South Africa's rand firms after mixed U.S. jobs data

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South Africa's rand firmed a tad on Friday as the dollar fell after a mixed bag of signals from U.S. jobs data left investors guessing on the course of interest rate hikes amid surging inflation.

At 1505 GMT, the rand was trading at 15.9400 against the dollar, 0.27% stronger than its previous close.

The rand had plumbed multi-month lows on Thursday after the dollar rallied on safe-haven demand fuelled by worries that the U.S. Federal Reserve would continue aggressive rate hikes, even though the central bank assured there were minimal chances of a 75 basis points rate hike.Higher interest rates in the United States may lead to capital outflows and currency depreciation in emerging markets.

On Friday, data showed that U.S. job growth increased more than expected in April but average hourly earnings increased just 0.3% after advancing 0.5% in March.South African government bonds also weakened, with the yield on the benchmark instrument maturing in 2030 up 7.5 basis points at 10.060%. Shares on the Johannesburg Stock Exchange retreated sharply, in line with the global markets which fell on concerns of more aggressive rate hikes to follow in the coming months.

 

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