South Africa's rand holds steady vs dollar, gold strike could be over

Reuters
A worker shows his payment outside the Moses Mabhida stadium in Durban
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A man counts South African rand notes in a file photo. REUTERS/Michael Buholzer

JOHANNESBURG (Reuters) - South Africa's rand held steady against the dollar early on Friday on hopes of a resolution to a strike in the gold sector, although the currency looked unlikely to make strong gains ahead of U.S. jobs data.

The rand was trading at 10.2200 per dollar at 0644 GMT, slightly firmer than a 10.2350 close in New York on Thursday.

Market players are waiting to hear whether a revised wage offer in the gold sector, where 80,000 workers have downed tools since Tuesday, could end the strike much sooner than expected.

The National Union of Mineworkers said some workers had started going back to work from Thursday night although details were sketchy.

However, the rand is still under pressure due to expectations the U.S. Federal Reserve will announce the withdrawal of stimulus as its economy improves, a prospect that has already seen investors heavily selling emerging markets.

A wave of strikes, that has included the auto sector, is fuelling the sell-off and making South African assets more vulnerable than its emerging market peers.

U.S. non-farm payrolls data is likely to support the view that the Fed will start reducing its monthly bond purchases.

Investors are expected to stay on the sidelines until after the 1230 GMT release of the data.

"Dollar/rand remains little changed from Thursday's close, with players unlikely to test levels below 10.200 with the US NFP looming," said Christopher Shiells of Informa Global Markets.

The rand could be pushed out of its 10.3700-10.1550 range if the U.S. data is firmer than expected.

Yields on government bonds were steady at 8.565 percent on the 2026 issue, with the shorter-dated 2015 note at 6.46 percent.

Treasury is looking to place 800 million rand in consumer price index-linked bonds and 777 billion rand in Treasury Bills in the session. Results of the sales are due at 0900 and 1000 GMT respectively.

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