Bloomberg News

Rand Pares Second Weekly Gain in Row on Slower U.S. Jobs Growth

July 08, 2011

July 8 (Bloomberg) -- The rand pared its second weekly gain against the dollar as slower-than-forecast U.S. job growth damped demand for higher-yielding, emerging-market assets.

The currency of Africa’s largest economy weakened as much as 0.7 percent to 6.7248 against the dollar and traded 0.6 percent down at 6.7211 as of 5:09 p.m. in Johannesburg, paring its second weekly increase to 0.2 percent. The rand rose for a seventh day against the euro, adding 0.2 percent to 9.5580.

U.S. payrolls increased by 18,000 in June, about one-sixth the median estimate in a Bloomberg survey of economists, the slowest pace in nine months, and the jobless rate rose to a 2011 high of 9.2 percent, dimming the outlook for global growth.

“This nonfarm payroll number, which was shockingly bad relative to consensus expectations, is clearly a selling signal for risky assets,” Benoit Anne, the London-based head of emerging-markets strategy at Societe Generale SA, wrote in an e- mailed note today. Emerging-market currencies such as the rand, “should overall sell off in the near term.”

The government’s 13.5 percent notes due 2015 rose 4 cents to 121.502 rand, reducing the yield by one basis point, or 0.01 percentage point, to 7.4 percent. The 6.75 percent securities due 2021 climbed, driving the yield down one basis point to 8.283 percent.

--Editors: Ana Monteiro, Linda Shen

To contact the reporter on this story: Chris Kay in London at ckay5@bloomberg.net

To contact the editor responsible for this story: Gavin Serkin at gserkin@bloomberg.net


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