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Rand retreats after firm US jobs data, stocks down

Mining shares lead stocks lower.

JOHANNESBURG – The rand weakened on Friday as strong US employment data kept emerging market currencies on the back foot with investors betting the Federal Reserve remains on track to raise interest rates at least once this year.

Stocks fell as gold and platinum mining shares weakened.

At 1515 GMT the rand had slipped 0.11% to 13.4575 per dollar, reversing a brief rally to 13.3050, to bring losses for the week to more than 2.5%.

“Dips are becoming shallower and there seems to be no stop in momentum for further rand weakness,” Standard Bank currency trader Oliver Alwar said in a note.

U.S. non-farm payrolls jumped by 222 000 jobs last month, beating economists’ expectations for a 179 000 gain, lifting the index measuring the greenback against a basket of major currencies by 0.3% .

The rand, along with Russia’s rouble and Turkey’s lira, has seen sharp declines this week with nervousness rising about higher global interest rates.

Worries over the independence of the Reserve Bank following a government graft unit’s recommendation that the regulator’s inflation-targeting mandate be changed has further weighed on the rand.

Bonds were also weaker, with the yield on the benchmark paper due in 2026 rising 2 basis points to 8.945% .

On the bourse, the benchmark Top-40 index fell 0.72% to 45 670 points, while the All-Share index was down 0.74% at 51 900 points.

Among the fallers, Anglogold Ashanti fell 3.82% to R127.24 as the gold spot price hit a two-month low after stronger than expected United States jobs data increased the likelihood of another US interest rate increase.

“Mining shares have become quite volatile, but they did have some big moves in just a couple of weeks so one can expect that there would be a bit of profit taking ahead of the weekend,” Afrifocus Securities portfolio manager Ferdi Heyneke said.

Northam Platinum and Impala Platinum dropped 4.41 and 2.76% respectively as platinum fell 1.18% . 

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