UPDATE 2-South African rand recovers from 4-month low on U.S. payrolls data

Published: 2023-10-06 tag: 0

South Africa`s rand shook off its earlier losses on Friday after it had slumped to a four-month low following U.S. payrolls data.

South African Rand coins are seen in this illustration picture taken October 30, 2020. REUTERS/Mike Hutchings/Illustration/File photo Acquire Licensing Rights

JOHANNESBURG, Oct 6 (Reuters) - South Africa's rand shook off its earlier losses on Friday after it had slumped to a four-month low following U.S. payrolls data.

At 1513 GMT, the rand was at 19.3650 against the dollar , about 0.8% above its previous close.

It earlier touched 19.6400 - its lowest since June - after non-farm payrolls data out of the United States showed a larger than expected increase in jobs for September.

The dollar last traded around 0.07% weaker against a basket of global currencies.

Analysts had earlier warned that encouraging U.S. employment figures would bolster the dollar and adversely impact the rand.

Despite Friday's gains, the rand has lost about 12.1% against the greenback since the start of the year.

"The rand has remained very weak this year, far removed from its fair value of closer to R15.00/USD. Substantial US dollar strength has been a key reason," said Investec economist Annabel Bishop in a research note.

Locally, South Africa's net foreign reserves fell to $54.980 billion by the end of September from $55.444 billion in August, central bank data showed on Friday (ZAFXRS=ECI).

On the Johannesburg Stock Exchange, the blue-chip Top-40 index (.JTOPI) closed around 0.6% higher.

South Africa's benchmark 2030 government bond was stronger, with the yield down 11 basis points to 10.890%.

Reporting by Tannur Anders and Bhargav Acharya, Editing by Mark Potter, Angus MacSwan and Alexander Smith

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