Rand firmer despite bleak jobless data, stocks fall

Bonds also gained, with the yield on the benchmark bond due in 2030 down 6 basis points to 9.485%.
Image: Waldo Swiegers / Bloomberg

The rand firmed on Tuesday, brushing off weak unemployment figures as caution toward safe-haven assets ahead of the keenly awaited presidential debate in the United States kept some risk currencies in favour.

At 1600 GMT the rand was 0.59% firmer at R16.95 per dollar from an overnight close of R17.05.

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Statistics on Tuesday showed more than 5 million more South Africans were “not economically active” during the strictest period of the coronavirus lockdown between April and June, dimming hopes of a quick economic recovery as Covid-19 infections slow.

“The numbers signal how difficult the economic recovery will be, with so many having completely just dropped out of the labour force. The chances of a V-shaped recovery are probably out of reach and the economy will need some form of further stimulus,” said economists at Nedbank.

The rand has seen turbulent trading in past few weeks, weakening around 6% since September 2018’s six-month best of R16.16 as a selloff of emerging assets globally triggered by second wave fears hit the local unit hard.

Traders said the rand would struggle to hold on to the gains, with volatility driven by short-term bets.

The Johannesburg Stock Exchange shed some of its points earned on a bullish Monday and reversed gains in early trade on Tuesday as weak local jobs data weighed heavy on sentiment.

The benchmark FTSE/JSE all share index closed down 0.39% to 54,507 points while the bluechip FTSE/JSE top 40 companies index slipped 0.51% to end at 50,320 points.

Bonds also gained, with the yield on the benchmark bond due in 2030 down 6 basis points to 9.485%.

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