JOHANNESBURG – South Africa’s rand traded firmer early on Thursday, stepping back from a three-week low as investors pared some of their long dollar positions ahead of much-watched U.S. jobs data.
At 0650 GMT the rand was 0.52 percent firmer at 14.6975 per dollar compared to an overnight close of 14.7750.
* The greenback is seen dipping briefly after the nonfarm payrolls due on Friday, with a swell in short positions suggesting a post-data squeeze.
* The rand caught a bloody nose on Wednesday after the trade balance swung to a 2.95 billion rand ($199 million) deficit in September from a revised 8.77 billion rands surplus in August, pushing the currency to its weakest since Oct. 9.[nJ8N1SW029]
* The currency lost around 5 percent of its value against the greenback over October as most emerging markets were battered by rising interest rates in the U.S. and concerns over global growth.
* But worries about the slack economic growth outlook, underlined in a bleak mid-term budget last week and a warning this week by S&P Global Ratings about the worsening fiscal conditions are set to keep the rand on the ropes into year-end. [nL8N1XA1MF]
* A Reuters poll this week found the rand is likely to gain only 2 percent in a year and settle at 14.50/$, far from the near three-year best of 11.51 it hit in March.[nL8N1X454S][nL8N1XB4QN]
* Bonds were flat, with the yield on the benchmark paper due in 2026 at 9.36 percent. Yields fell 9.5 percent on Wednesday.
* The Johannesburg Stock Exchange was due to open higher at 0700 GMT, with the JSE securities exchange’s Top-40 futures index up 0.42 percent.