South African rand weaker as U.S. jobs data boosts dollar

South African bank notes featuring an image of former South African President Nelson Mandela are displayed at an office in Johannesburg, file. REUTERS/Siphiwe Sibeko

JOHANNESBURG, Feb 4 (Reuters) – The South African rand weakened on Friday, eating into the week’s gains as the U.S. dollar was bolstered by much better-than-expected jobs numbers.

At 1500 GMT, the rand traded at 15.4800 against the dollar, around 1.3% weaker than its previous close but still up around 0.8% on last Friday’s closing level.

The dollar (.DXY) turned positive against a basket of currencies as the U.S. economy created far more jobs than predicted in January, raising the chances of a larger Federal Reserve interest rate hike in March. read more

Earlier in the week the rand had been supported by dollar weakness, as hawkish comments by the European Central Bank and a rate hike by the Bank of England lifted the euro and the pound .

Johannesburg-listed stocks closed slightly higher on Friday, struggling for direction on a typically slow Friday with thin volumes, Independent Securities trader Ryan Woods said.

The All-share index (.JALSH) ended up 0.25%, and the Top-40 index (.JTOPI) up 0.32%.

Stocks had started the week much stronger after upbeat earnings forecasts from South African companies, but on Thursday they snapped gains as moves towards higher global interest rates and a slump in U.S. tech stocks dampened risk appetite.

Woods said nervousness among investors still lingered.

Next week, investors will turn their attention to local data releases including December mining (ZAMNG=ECI) and manufacturing (ZAMAN=ECI) figures, as well as a State Of The Nation address by President Cyril Ramaphosa on Feb. 10.

The government’s benchmark 2030 bond dropped on Friday, with the yield adding 6.5 basis points to 9.29%.

Reporting by Alexander Winning and Nqobile Dludla; Editing by Susan Fenton

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