South African Rand coins are seen in this illustration picture
South Africa’s rand, stocks and government bonds strengthened on Friday after better-than-expected foreign reserves data, and got a further boost from a weaker dollar knocked by a soft U.S. jobs report.
South Africa’s net foreign reserves rose to $65.899 billion at the end of August from $65.143 billion in July. Nedbank economists had expected the country’s international liquidity position to edge up to only $65.2 billion.
At 1411 GMT, the rand traded at 17.5475 against the dollar , roughly 1.3% up on its previous close, paring its recent losses.
The rand was on the back foot on Thursday, hurt partly by a firmer dollar which dulled the appeal of most emerging market currencies.
“It was difficult to pinpoint the exact reason for the bearish sentiment, although the negative Ipsos poll may count as a good barometer for the general feeling in South Africa concerning the economy and the country’s politics,” ETM Analytics said in a research note.
Data from global market research firm Ipsos showed that the wave of optimism among South Africans since the establishment of the government of national unity (GNU) in 2024 is fading partly due to disagreements within the coalition government, local newspaper BusinessDay reported.
The greenback last traded 0.7% weaker against a basket of currencies after data showed that U.S. job growth weakened sharply in August while the unemployment rate increased to 4.3%, confirming that labor market conditions were softening and sealing the case for an interest rate cut from the Federal Reserve this month.
On the Johannesburg Stock Exchange, the Top-40 index (.JTOPI), opens new tab last traded up 1.8%.
South Africa’s benchmark 2035 government bond also firmed, with the yield falling 8 basis points to 9.565%.