* Rand licks wounds after ECB disappointment
* Traders await U.S. payrolls numbers at 1230 GMT
JOHANNESBURG Aug 3 (Reuters) – South Africa’s rand weakened
against the dollar on Friday after the European Central Bank
decided to delay any remedy for the region’s debt crisis,
sending Spanish and Italian borrowing costs higher and denting
investors’ appetite for risky assets.
The rand was 0.39 percent weaker at 8.3625 against the
greenback at 0653 GMT, from Thursday’s New York close of 8.34.
Investors had been bracing themselves for another round of
bond buying from the ECB to help lower crippling borrowing costs
for Spain and Italy.
But ECB President Mario Draghi indicated that any
intervention would start in September at the earliest and would
depend on countries in borrowing trouble making a formal request
and accepting strict conditions and supervision.
“The rand is likely to remain under pressure until decisive
action is taken by the world’s major central banks,” Rand
Merchant Bank said in a note.
Major focus is also on U.S. non-farm payrolls data due at
1230 GMT.
“I would imagine non-farm payrolls later this afternoon is
going to be a big driver, so I would imagine fairly quite
trading until then. It will be probably range-bound trade
between 8.30-8.40” said a Johannesburg rand trader.
The rand often tracks the euro, the currency of its main
trading partner. The relationship has meant a very volatile year
for the currency of Africa’s biggest economy.
Government bonds firmed, with both yields on the main
benchmark bonds down three basis points to 5.510 percent for the
three year bond and 7.345 percent for the longer-dated
14-year paper.
(Reporting by Vuyani Ndaba; Editing by Ed Cropley)
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