The rand was firmer against the dollar in late trade on Friday as the greenback came under pressure after US non-farm payrolls data showing there's still no end in sight to the severe recession that began more than one year ago.
However, traders cautioned that the local currency remained prone to wild swings until some stability returned to global markets.
After weakening to 10.68 per dollar overnight, the rand recovered significantly in early trade on Friday as the euro lifted off its lows against the greenback but was off the session's best levels in late trade.
At 4pm the rand was bid at 10.5190 to the dollar from an overnight close of 10.6344. It was bid at 13.3745 to the euro from a previous 13.3422 and at 14.9895 against sterling from 15.0230 before.
The euro was bid at US$1.2716 from US$1.2541 overnight.
Traders said the US jobs data for February was much in line with expectations and not as dire as some had thought it might be.
Dow Jones Newswires reports that the US economy continues to hemorrhage jobs at monthly rates not seen in six decades, a government report showed, signaling that there's still no end in sight to the severe recession that has already cost the US over four million jobs.
The report suggests that households, already seeing the value of their homes and investments plunge, face added headwinds from the labor market, which could put more pressure on consumer spending in coming months.
Nonfarm payrolls, which are calculated by a survey of companies, fell 651 000 in February, the US Labor Department said Friday, in line with economist expectations. However, December and January were revised to show much steeper declines. In the case of December, the revision was to a drop of 681 000, the most since 1949 when a huge strike affected half a million workers. However, the labor force was smaller then than it is now.
The economy has shed 4.4 million jobs since the recession began in December 2007, with almost half of those losses occurring in the last three months alone. And unemployment is lasting much longer. As of last month, 2.9 million people were unemployed for 27 weeks or more, up from just 1.3 million at the start of the recession.
According to Dow Jones Newswires the euro rose to session highs versus the dollar and yen after the release of the February U.S. payrolls report, which was in line with expectations.
The euro advanced to a session high of $1.2741 as investors, who widely girded themselves for a larger decline, felt comfortable taking on more risk as US stock futures edged higher.
The euro hit an intraday high against the yen as well, Y124.21, recently.
The dollar also rose some versus the yen, but remains down on the day.
"The market reaction tells us of an expectation of a truly shocking number," said Adam Cole, global head of foreign exchange strategy at RBS Capital Markets.
"For that reason, stock futures have gone better bid, and that is generally seeing the dollar going down," he said.
Bonds discount some SARB action
Bonds were on the front foot on Friday as the market began to discount some potential repo action before April 16 and shorts were squeezed.
By 3.59pm the short-term government R153 bond was at 6.620 percent from its previous close of 6.640 percent. The medium-term R157 was at 7.830 percent from a previous 7.930 percent, while the long-term R186 was bid at 8.225 percent from a previous 8.315 percent.
