Rand sheds gains as US payrolls beat the mark

The rand shed earlier gains against the dollar on Friday afternoon — after breaking through R14 on Thursday — as the US added more jobs in June than expected.

Non-farm payrolls — which measure changes in the US labour market over a month — saw job numbers increase by 224,000 in June, from a gain of 75,000 in May, exceeding the Bloomberg consensus of 160,000.

The unemployment rate, however, rose to 3.7% in June from 3.6% in the previous month. Average wages grew 0.2%, unchanged from May. The numbers are considered one of the most important indicators of the health of the US economy, with expectations mounting that the US Federal Reserve will cut interest rates at their next meeting in three weeks’ time.

­

“Investors will be hoping that the Fed’s response offers enough support to prolong the business cycle,” Mercato Financial Services analyst Nico du Plessis said in a note. But, historically, a drop in rates usually comes too late to prevent a downturn once “those seeds have been sown”.

At 3.20pm, the rand had weakened 1.05% to R14.1969/$, 0.51% to R15.9378/€ and 0.5% to R17.7572/£. The euro had fallen 0.52% to $1,1227.

Gold had fallen 1.44% to $1,394.72/oz and platinum 1.95% to $819.44. Brent crude was up 0.78% to $63.65 a barrel.

The benchmark R186 government bond was weaker, with its yield rising 4.5 basis points to 8.11%. Bond prices move inversely to bond yields.

BusinessLIVE