JOHANNESBURG Nov 1 (Reuters) – South Africa’s rand ended
steady against the dollar on Thursday, trading within the week’s
range as rand bears took a breather and the market remained
lethargic since the closing of Wall Street earlier in the week.
The rand initally firmed to its best in the session soon
after positive jobs numbers came out of the United States during
late afternoon trade in Johannesburg.
By 1540 GMT, the rand had come back to 8.6680
against the dollar, off its best level of 8.6380.
“The rand’s sideways trading is in part that the US was out
for a couple of days. Beyond that, short term rand bearishness
lost momentum,” said Roderick Ngotho, emerging markets forex
strategist for RBS.
The local unit closed at 8.67 in New York on Wednesday and
dealers think gains will be capped at 8.60, a level it has
bounced from in the past two weeks.
“Dollar/rand will trade in higher ranges over the medium
term – six months – because it seems like the market has just
woken up to the structural weaknesses in the economy. The rand
lacks a positive story, meanwhile Fitch is likely to downgrade
in January so the negatives will just keep adding up,” Ngotho
added.
Fitch ratings agency is the only one of three agencies that
has not cut South Africa’s credit rating, saying they will stick
to their schedule of reviewing the rating in November and
releaese the outcome in January.
On Thursday the local purchasing managers’ index for October
remained below 50, the level that distinguishes contraction from
expansion, signalling weak output numbers when the official data
is released next Thursday.
The employment category indicated a bleak outlook for jobs
in the third quarter, likely on concerns about the impact of
mining lay-offs from the strike-hit industry.
Continued…
